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Long Term Care Insurance

Long-term care insurance is designed to cover the costs of care for those requiring assistance with activities of daily living such as eating, bathing, dressing, or moving from a bed to a chair.  

 

Each policy is different and regulations vary among states.

 It is important to carefully review your specific policy.

 

Coverage 

  • Long-term care insurance generally covers in-home care, adult day programs, assisted living, residential care, and nursing homes on a short or long-term basis.  

  • Most policies require a plan of care from a medical provider documenting the need for assistance with at least 2 of the following activities: bathing, dressing, transferring, eating, toileting, and continence care or a terminal diagnosis. 

 

Premiums

  • As with any insurance, it is important to stay current on monthly premiums so that the policy is not cancelled. 

  • Premiums are usually waived once insurance coverage begins.

Policy Limits

  • Policyholders are reimbursed a daily amount up to a preselected limit or the daily maximum benefit.

  • Most policies also have a maximum lifetime benefit.

 

Waiting Periods

  • Most policies have a Waiting, Elimination, or Deductible Period - a period of time after qualifying for care and before the insurance company will begin paying for the covered care. 

  • The most common options are 30, 90, or 100 days.

  • Some policies waive the waiting period if the beneficiary has a terminal diagnosis.

  • Some policies require that the waiting period is met only once during the life of the policy, while others apply it again after a certain period of time without needing care has passed. 

  • Some policies require that care is received each day of the waiting period, whereas others may only require it once per week. For example: If a person receives homecare twice per week, it may be counted as 2 days towards the waiting period, or the entire week of 7 days may be counted depending on the policy.

 

Purchasing and Cost

  • People in poor health or already receiving long-term care services may not qualify for long-term care insurance as most individual policies require medical underwriting. 

  • Policies are usually purchased by people between the ages of 50 and 65.

  • The cost of a policy will depend on age, the maximum payments, and the optional benefits.

  • The Shopper's Guide to Long-Term Care Insurance can assist in understanding insurance options.

 

Hybrid or Linked-Benefit Policies: Using Life Insurance to Pay for Long-Term Care

  • Some policies combine long-term care with life insurance or, less often, an annuity to pay for care.

  • Most of the life insurance hybrids provide long-term care coverage  when the need arises and result in the life insurance payout being reduced or eliminated if you use long-term care benefits. 

  • Talk with your insurance broker to learn more about these policies or visit LongTermCare.gov

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