If you’re one of the 7.5 million Americans with a long-term care insurance policy, you know you’ve already secured coverage for care in case you need help performing at least two activities of daily living (ADLs) without help.
As you consider the next phase of your retirement, though, you’re likely considering what you want your life to look like; for many, ensuring access to care is important, but it’s only a small piece of the pie.
Senior living options like Continuing Care Retirement Communities (or CCRCs, also known as Life Plan Communities) offer access to high-quality care, too — but integrated into a holistic package: Low-maintenance living, a community of contemporaries, and opportunities to stay mentally and physically active.
So, do you really need long-term care insurance if you’re exploring a move to a CCRC? And do you need the services of a CCRC if you’ve already got long-term care insurance coverage?
Jump to: I already have long-term care insurance. Do I need the services of a CCRC? | Do I need long-term care insurance in a Life Plan Community? | Can long-term care insurance lower my costs in a Life Plan Community?
Unless you have a crystal ball, there’s no telling what the future holds in terms of your care needs or the costs you’ll encounter. If you do need care, a long-term care policy can provide financial benefits up to a point.
Every insurance policy has coverage limits: daily and monthly limits as well as lifetime benefits caps. Plus, all policies are time limited. Be aware of both those limits as you make plans for future care.
A CCRC, on the other hand, offers residents lifetime access to future care at more predictable rates or even with little to no increase in your monthly fees.
Long-term care insurance and your CCRC contract can work well together. Ask both your insurance carrier and any Life Plan Communities you’re considering about how your coverage will align with on-site care (and any associated costs).
However, the question of whether you “need” the services of a Life Plan Community goes beyond care.
Long-term care insurance coverage can dovetail nicely with the services offered in a CCRC. How well they play together depends on your individual policy as well as the contract type of your CCRC.
Here’s a quick look at the different types of contracts CCRCs offer:
Inclusive CCRCs offer unlimited access to available care with little to no increase in your monthly fee.
If you’ve invested in this type of contract, investing in a long-term care policy may seem redundant.
However, your policy benefits could be used to cover part or all of your monthly fees if you start needing care that qualifies you for benefits.
CCRCs with this model include a limited number of days of care in the monthly fee.
Once these days are exhausted, care is billed at market rates. In these cases, a long-term care policy could help cover those costs.
Fee-for-service communities don’t factor care services into resident fees and bill separately at market rates.
Long-term care insurance can provide additional financial support for residents in CCRCs that fall under this contract type.
When you apply to live at a Life Plan Community, you’ll be asked for your financial records to confirm that you have the means to pay for your living expenses and care.
If you have long-term care insurance, your total benefit amount may be included as an asset in the documentation you provide.
Bottom line: Long-term care insurance can offer a cushion for the costs of a Life Plan Community. But as you can see, there are some caveats and plenty of individual factors to consider.
Everyone’s financial situation is different. Speak with a trusted financial professional to learn more about the ramifications of long-term care insurance and your retirement plans.
Navigating healthcare for seniors is rarely a pleasure cruise — but we know these waters pretty well.
Our teams chat all the time with seniors and their loved ones about paying for care and how long-term care insurance can pair with life in a CCRC.
Want to talk about planning for future care needs or hear more about life in one of Vi’s 10 communities?
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We’ll be in touch soon to share expert insights and resident perspectives that we hope are helpful, and one of our team members will also be reaching out to answer any questions you may have.