What Does Nursing Home Insurance Cover and How Much Does It Cost?

Family going over options to find Nursing Home Insurance
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How to Get Insurance for a Nursing Home

 There are two kinds of insurance when it comes to looking into nursing home insurance:

  1. Insuring your personal belongings and/or liability when you live in a nursing home
  2. Purchasing insurance that will help you cover the costs of living in a nursing home if you ever need to live in one

These are two different kinds of insurance that are useful to know about as you plan for the unexpected, or need to make a move into a nursing home for either yourself, your spouse or your parents.

2 Kinds of Nursing Home Insurance

With both types of nursing home insurance, there are ways that can help you save money, and also make smart planning choices for the future. This article covers an overview of these various insurance coverages for covering you in a nursing home.

Insuring Personal Belongings in a Nursing Home

When you move into a nursing home you usually get rid of a lot of the contents of your home because you are moving into a smaller space. Often times you may give items to family members, or sell items at the time you sell you home. The things that you keep when moving into a nursing home will often be the items you most cherish so it's important to know what might happen if you have an insurance claim due to someone stealing your personal belongings or contents of your new residence or other perils like a fire. 

Assisted Living or Nursing Home Insurance for Contents and Personal Belongings

When living in a nursing home there will be several factors that come into play to determine if you or your family member needs to buy special insurance to cover contents and personal belongings

  1. Check if the home insurance of children will cover parents contents while in the nursing home. Some insurance companies will consider that the parent, once in a nursing home may be the responsibility of the children, so very often there is coverage for "parents in a nursing home" in the policy wording of family member's home insurance. If the policy does not provide enough, the children may have more negotiating power to obtain favorable rates by asking if an endorsement can be added for contents of the parent in the nursing home. Always explore this option as there may be coverage for you already in place, and you may not need to spend more money. Nursing home costs are expensive, so saving money where you can become important. Speaking to the insurance broker or agent to understand the options or included coverages and conditions on your home policy is important because just looking at the declaration page of the policy will not usually include these details. The information varies by each insurance company and is worth the call.
  2. Whether the nursing home is assisted living or independent living with people having access to the dwelling or not may be a factor on whether an insurance company or underwriter would be willing to take on the risk. This factor will also guide what kind of policy a person may need in the nursing home or assisted living residence.
  3. The value of the contents and the type of contents will impact what kind of insurance you need. Some people just need coverage for standard personal belongings, others may be looking to specifically insure high-value items like jewelry and watches or furs.

Where to Buy Insurance for Contents in a Nursing Home

Contents insurance can be purchased through a personal lines insurance broker, agent, direct from an insurance company, or online. Start by speaking to the company that you insured your home with, they may be able to offer you a new policy for nursing home coverage with reduced contents amounts or specialized coverage. As mentioned above, you can also ask your children if their home insurance policy would cover you while in a nursing home. You should also consider calling an insurance broker to help you find good insurance in the nursing home. An insurance broker will have more than one insurance company they deal with. Just like using a broker for finding affordable health insurance can help save you time and money, when looking for specialized coverages like nursing home contents insurance, a broker or ​independent agent will have access to more resources than a captive agent.

Getting Liability Insurance in a Nursing Home

If you move into a nursing home, you may be asked to purchase liability insurance in the same way tenants are asked to purchase renters insurance, or condo owners may be required to carry liability insurance. The reason for this is that as a resident in the nursing home you may become liable for damages caused by your activity there or actions. If you purchase insurance for your contents in the nursing home ask the same insurer about the liability. It may be included.

Liability for Parents in a Nursing Home

If you are looking for liability for parents in a nursing home, then ask your insurance representative if the liability is covered, or if they can offer an extension of liability to cover your parents in the nursing home. Do not assume it is automatically covered.

What Is Nursing Home Insurance or Long-Term Care Insurance?

Nursing home insurance is a type of supplemental health care insurance or long term care insurance, except instead of focusing only on assisted living costs, by discussing the options with your financial advisor, you can tailor your policy to make sure you choose the maximum benefits to cover the cost of living in a private nursing home, this way it can be geared at helping you cover the cost of a nursing home.

Tips to Save Money on Long-Term Care or Nursing Home Insurance

There are several options available when you review the type of policy you will purchase for a nursing home expenses. Here are some basic tips to save money:

  1. Don't put off buying insurance until you are afraid you need it. Remember that just like life insurance, the younger you buy this kind of policy the more money you will save.
  2. If you are married or have a domestic partner, you may benefit from considering a shared policy.
  3. Look into the option of private vs. semi-private care and compare the costs. 
  4. Consider how long the elimination period is and get quotes with longer elimination periods. 
  5. Carefully review the coverage options, benefit period, maximum limits payable and types of coverage offered. Choosing more or fewer options will impact your cost. Some policies also offer discounts depending on the payment method you choose, ask if taking an annual plan will save you money. 

Will Medicare or Medicaid Pay for a Long-Term Care or a Nursing Home?

Although Medicare or Medicaid may cover a portion of the costs for living in a nursing home under certain specific conditions, it will not cover all the costs. 

How Much Does Living in a Nursing Home Cost?

Living in a nursing home can be very expensive. Genworth has developed an online tool that helps give an idea of the costs of assisted living.

How Much Does Nursing Home Insurance Cost?

In our article on long-term care insurance, we provide examples of the estimated costs and some strategies to find good rates on nursing home and long-term care coverage. You could be looking at anywhere from $1,000 to over $3,000 a year, but this depends on the coverages, your age, and other options we discuss below. 

How Much Money Will a Nursing Home Policy Pay You?

When you discuss the options for nursing home insurance coverage with a financial advisor they should provide you with several coverage options. Depending on your personal situation which will include an assessment of your current health, your age at the time you purchase nursing home coverage and the level of coverage you choose, a policy could pay between $100 to $500 a day on average. The amount that a policy will pay will be clearly outlined at the time you purchase your policy, so be sure and ask if the limit for daily cost is not clear to you.

How Long Will Costs Be Covered for a Nursing Home?

Costs for nursing homes are not covered for unlimited amounts of time. Just as there will be a daily limit of how much they will pay you when you're in a nursing home listed within the policy, there will also be specific time limits mentioned as well. this time limit would be referred to as the benefit period. 

When Does Nursing Home Insurance or Long-Term Care Start Paying?

Nursing home insurance may have an elimination period. This is like the waiting period in various health insurance policies before coverage kicks in. If you take a policy with a shorter elimination period, or none, then you will pay more. If you decide to take a longer elimination period, you are essentially agreeing to cover the costs yourself for a longer period before your policy starts to pay. This ability to self-insure for the longer elimination period will help you save on annual premiums, even though it will cost you more at the time of a claim. Discuss these options with your financial advisor to understand what the best option will be for your situation. You do not want to take a longer elimination period then find that you can afford the costs at a critical time.

When Should a Person Buy Nursing Home Insurance?

The longer you wait to buy nursing home insurance the more expensive it will be. The cost is based on your age and health. You may also risk not being able to purchase the insurance if your health deteriorates as you get older. If you are considering purchasing this coverage, your 40's or 50's will ensure the best chance of being able to get a good rate.

American Association for Long Term Care Insurance cites that once you are in your 50's there's a 14 percent chance of being turned down and this number increases to 25 percent in your 60’s.

What Happens If You Buy Nursing Home Insurance But Never Use It?

If you benefit from good health and never end up using your nursing home insurance, you may have some options:

Not all policies offer these options so it is important to ask about these when you buy a policy:

  1. The option to cash out. When you purchase a policy ask about whether you will have a cash out option.
  2. Some health insurance policies may also offer the opportunity to receive dividends, a similar concept to life insurance policies with values.
  3. Depending on the type of policy you choose, you may also have the option to take a death benefit where a beneficiary may be able to cash out if you never use the coverage. 

Kinds of Coverage You May Need When Thinking About Living in a Nursing Home

Whether you are planning for your future in the long term with Nursing Home Insurance and Long-term Care or moving yourself or a family member into a nursing home "now" and needing to find liability or contents insurance, we've covered several aspects of insurance to help you plan and consider your options. By researching the various options and using resources with the help of financial planners and insurance brokers or agents you can maximize the benefits you receive and make sure you protect your assets and your health.