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Long-Term Care Insurance

Getting long-term care insurance is one way to prepare for your golden years. Long-term care refers to services that are not covered by regular health insurance.


A long-term care insurance policy helps cover the cost of care needed for a chronic medical condition, disability, or Alzheimer’s disease. Most policies will reimburse you for the care services provided in various places:

  • Your Home
  • A Nursing Home
  • An Assisted Living Facility
  • An Adult Daycare Center

Considering the cost of long-term care is an important part of retirement planning. It’s best to get a coverage while you’re still young as you won’t qualify for long-term care insurance if you already have a severe health condition. Getting long-term care insurance can be the best choice depending on your situation and preferences.

Why Should You Buy Long-Term Care Insurance?

More than 60 percent of 65-year-old people need long-term care services or support based on recent data.


Regular health insurance doesn’t cover long-term care, and Medicare can’t cover the costs as well. It can only cover short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab only. It also doesn’t pay for custodial care, which includes supervision and daily task support.


People buy long-term care insurance for two reasons:

  • To Protect Savings
  • To Give You More Choices for Care

How Does Long-Term Care Insurance Work?

To buy a long-term care insurance policy, you fill out an application and answer health questions. The insurer may ask to see medical records and interview you by phone or in person.


You choose the amount of coverage you want. The policies usually cap the amount paid per day and the amount paid during your lifetime. Once you’re approved for coverage and the policy is issued, you start paying premiums.


Under most long-term care policies, you’re eligible for benefits when you can’t do at least two out of six activities of daily living (or ADLs) on your own or you suffer from dementia or other cognitive impairment.


Some activities of daily living include the following:

  • Bathing
  • Incontinence Caring
  • Dressing
  • Eating
  • Toileting
  • Transferring (Getting in or Out of a Bed or a Chair)

When you need care and are interested in making a claim, the insurance company will review medical documents from your doctor and may send a nurse to do an evaluation. Before approving a claim, the insurer must approve your plan of care.


Under most policies, you’ll have to pay for long-term care services on your own for a considerable amount of time (30, 60, or 90 days), which is called the “elimination period,” before the insurer begins to reimburse.


The policy starts paying out after you’re eligible for benefits and usually after you receive paid care for that period. Most policies pay up to a daily limit for care until you reach the lifetime maximum.

Cost of Long-Term Care Insurance

There are factors that affect the rate that you have to pay:


Age and Health: The older you are and the more health problems you have, the more you’ll pay for a policy.


Gender: Women generally pay more than men because they live longer and have a greater chance of making long-term care insurance claims.


Marital Status: Premiums are lower for married people than for single people.


Insurance Company: Prices for the same amount of coverage will vary among insurance companies. That’s why it’s important to compare quotes from different carriers.


Amount of Coverage: Wider coverage requires a higher payment, but you can get access to various benefits: higher limits on the daily and lifetime benefits, cost-of-living adjustments for inflation, shorter elimination periods, and fewer restrictions on the types of care covered.

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