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Long-Term Care Insurance

Long-Term Care Insurance Basics

Long-term care insurance covers some of the expenses if and when you reach the point of needing assistance with daily life. As part of a comprehensive benefits program, long-term care insurance (LTC) is offered to help protect your savings and investments as you age.

Much like other insurance policies, LTC Insurance is for anyone who is interested in making sure that they and their family are protected in the event of a life-changing event. Below are three things to keep in mind when considering this form of coverage:

• Health plans do not typically cover expenses for long term care.
• You’ll have to pass underwriting. Certain medical conditions may exclude you from obtaining coverage.
• Premiums are based on the age when you first obtain coverage. The sooner you obtain coverage, the lower the premiums.

Depending on your plan, coverage may include costs for nursing homes, assisted living facilities , adult day care, hospice and some home health care including care by informal caregivers. Care needs are dependent on when you need help with the activities of daily living (i.e., bathing, dressing, bathroom needs, mobility, eating and hygiene).

Selecting the proper level of coverage is simple. First, consider the geographic area in which you most likely would need services. Costs vary greatly by location, are typically higher in metropolitan areas and account for inflation. Second, determine how much you’ll be able to self-fund from your savings and investments for any kind of care. Third, calculate the amount of premiums you can afford to pay.

There are various forms of coverage. Below are a few types:
Reimbursement: You are reimbursed for actual charges and the remainder stays in your account. For example, you purchase a $200/day policy, but your bill is only $150/day. The remaining $50 stays in your pool of coverage.
Indemnity: You will receive all of what your policy covers. You will receive $200/day even if your bill is $150/day.
Partnership: This type of policy will protect your assets and allow you to qualify for Medicaid.