Long Term Care Insurance

What is long-term care insurance (LTCI)

Long-term care insurance is one way you may pay for long-term care. This type of insurance will pay or reimburse you for some or all of your long-term care costs. It wasintroduced in the 1980s as nursing home insurance but now often covers services in  other facilities.

Long term care is the assistance provided to a person who has a severe cognitive impairment requiring continual supervision or is unable to perform the activities of daily living (such as bathing, dressing, or getting up from a bed or chair). Long term care services may also include assistance with day to day activities such as medication management, personal hygiene, light housekeeping or meal preparation. Services provided by a physical, respiratory or speech therapist may also be included. Long term care can be provided in your home, an adult day care, assisted living facility or a nursing home.

Types of Care

For some people, the mention of long term care brings up thoughts of nursing homes as the first, or only, resource for receiving long term care services. The fact is, however, that long term care services may oftentimes be provided in an assisted living facility, the patient’s home or through a community resource in lieu of entering a nursing home. Of course, long term care services are available in nursing facilities should the need arise.

Home Health Care Services – Home Health Care services are generally those services designed to help keep the individual living comfortably in his or her own home for as long as possible. These services may include skilled nursing or other professional services, such as part-time and intermittent skilled nursing services, home health aide services, physical, occupational or speech therapy, audiology services and medical social services by a social worker.

Adult Day Care – Adult Day Care provides services including health, social and related support services provided by and at an Adult Day Care Center during any part of the day on a less than 24-hour basis.

Assisted Living Facility Care – Assisted Living Facilities have been designed for those individuals who require some assistance with their daily activities (such as bathing, housekeeping, or assistance with taking medications) and as such are not able to live alone, but are not yet in need of constant care. Assisted Living Facilities provide 24-hour-a-day care and have a Physician or Registered Nurse available in the event of an emergency, but are not considered to be a nursing home or even an alternative to a nursing home. Rather, assisted living facilities often serve as a bridge between independent living and nursing homes.

Nursing Home Care- Nursing Homes provide skilled nursing care, rehabilitation, and custodial services for frail or disabled adults. Nursing Homes do not include facilities operated primarily for the treatment of mental and nervous disorders, alcoholism, or drug addiction. Most states require that nursing homes be licensed or certified under the laws of the state in order to provide services.

The Cost of Care – The cost of care varies with the level of services provided and geographical location.

Considering the Costs – Consider this: the costs of long term care services are likely to continue to increase in the future due to inflation. This means that a long term care need that is already expensive in terms of today’s dollars could be significantly more expensive in 10 years, 20 years, or at such time that long term care might be required.

Who Pays for It?

People pay for long-term care in different ways. These include individuals’ or their families’ personal resources, long-term care insurance, and some help from Medicaid for those who qualify.

Medicare, Medicare supplement insurance, and the health insurance you may have at work usually won’t pay for long-term care.

For more information on Long Term care policies, please click here

Types of Long Term Care Policies

Tradtional LTC Policies

You can purchase a policy which provides a monthly or daily benefit which pays for home care or nursing home care.  You can usually buy a policy which will cover you for up to 6 years.

Benefit amounts available varies by insurance carrier, but typically you can buy between $100 and $600 per day. Premiums are based on one and health AND premiums are NOT guaranteed to stay the same for the life of the policy.

Lump Sum Policies

You pay a one-time lump sum premium to the insurance company and in exchange you are provided a pool of benefits to pay for home care or nursing home care if needed. The pool of benefits will increase each year if you have an inflation rider on the policy.  The policy also offers a 100% money back option if you elect to surrender the policy (Restrictions apply)

Linked Benefit Policies

Many Universal Life insurance policies and some Whole Life policies now offer an optional rider to use a portion of your death benefit to pay for home care or nursing home care while you are still living. It you elect this, your life policy’s death benefit will be reduced as you use the funds to pay for home care.