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