Unit 2, Lesson 6 Overview of Disability and Long-Term Care Insurance AOF Insurance Unit 2, Lesson 6 Overview of Disability and Long-Term Care Insurance Copyright © 2009–2012 National Academy Foundation. All rights reserved.

Disability and health insurance go well together Health insurance and disability insurance go well together. Health insurance pays for medical expenses, not lost wages. Disability insurance covers lost wages, not medical expenses, due to any of the following: Medical Expenses Lost Wages Injury Physical Illness Mental Illness Financial impact of major illness or injury

Serious disability is likelier than many think 42-year-olds are four times more likely to become disabled than die during their working years. The odds of someone 35 or older being disabled for five years or more are 14%.

Extended disability can cause great financial harm If you are disabled with no insurance, you might not be able to pay: Mortgage payments or rent Auto payments Food and fuel Medical expenses not covered by insurance Should banks be prevented from foreclosing on homes of people facing disabilities? Why or why not?

Long-term care insurance provides important protection Long-term care pays for assistance when you can’t complete activities of daily living (ADLs). ADLs are: dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking. Without such coverage, costs for assisted living over long periods of time can be very expensive. Type of Assistance Average Monthly Cost Semi-private room in nursing home $5,610 Private room in nursing home $6,270 Home health nurse 3x/week $1,044 Daily care in adult care center $1,770 Have you ever been so sick you couldn’t complete an ADL? Who took care of you?

Long-term care is gaining in popularity as America ages Long-term care insurance is being sold more often, as Baby boomers are aging. Medical costs are rising. People are living longer, increasing chances of needing long-term care. Source: U.S. Census Bureau 2004a, 2004b, 2004c Can you think of other reasons its popularity is growing?

Many of us will need long-term care at some point 70% of people older than age 65 will require long- term care. Women, on average, require 3.7 years of long-term care. Men, on average, require 2.2 years of long-term care. Why do you think women are likelier to require long-term care than men?

Disability and long-term care insurance protect assets Often the elderly have limited income. Disability and long-term care insurance help seniors avoid: Using up their retirement savings Putting financial pressure on their children