Understanding Long-Term Care Insurance


Long-term care refers to help with personal or medical needs over a long period. Most people who turn 65 years old usually need long-term care at a certain time in their lives, making it something that every household experiences. And, while most people can be affected with this long-term care, few people take advantage of long term insurance to help with the expenses.

But long-term care is a significant expense, and most people cannot afford to pay the whole costs out-of-pocket. Most employer-based health insurance doesn’t cover extended daily care. Ideally, health insurance can only pay for doctor and hospital bills. Therefore, long-term insurance can assist offset the costs of long-term care needs. This article discusses long-term insurance.

Long-term care insurance explained

It can be hard to imagine now, but there are good chances that you may require some assistance taking care of yourself in the long run. Therefore, purchasing long-term care insurance can be a great way you can prepare.

Remember that long-term care includes a wide range of services that regular health insurance doesn’t cover. This includes help with routine daily tasks, such as dressing, bathing, or even getting in and out of your bed.

You need a long-term insurance policy as it can help you cover the expenses of this care once you experience a chronic medical condition, a disorder like Alzheimer’s disease, or a disability. Most insurance policies can reimburse you for care you get in various places. This includes your home, an assisted living facility, a nursing home, and an adult day care center.  

Because long-term care expenses can be a crucial part of most long-range financial plans, especially when you are in the 50s or more, you don’t have to wait until you need care to purchase coverage. Take note that you may not qualify for long-term care insurance when you are already experiencing a debilitating condition.

And, long-term care insurers may not approve some applicants who are more than 75 years old. Most people with long-term care insurance purchase it when they are between 50 and 60 years old. Whether or not the long-term care insurance policy is the right option can depend on your preferences and situation. A long-term care insurance policy can benefit you in the following ways:

Covers care in various settings

When some people think of long-term care, they always associate it with nursing homes. But most of the people who get long-term care live in their houses, not in nursing homes or assisted living facilities.

Long-term care is required when a person can’t do daily tasks like eating, dressing, bathing, and many more. This help can usually be offered in your home by a home health aide. While it’s not necessarily good to think of such circumstances where long-term care can be required, long-term care insurance can assist you to cover the expenses. It can give you a way to get care in your home rather than in a nursing home or assisted living. 

It can be hard to know if your family member may have to care for you when you need long-term care. Caregiving is usually a huge emotional and financial burden. Because of the high costs associated with long-term care, many caregivers tend to use their savings and retirement funds to cover the care. Besides, the logistics of caregiving can be a huge challenge when your family member lives far away or cannot manage it with their family or work obligations.

That said, long-term insurance can cover a wide range of healthcare costs compared to other types of health care insurance policies. For instance, most of the other health care insurance policies don’t cover long-term care and can just pay for care at home, though with quite limited circumstances.

These healthcare insurance policies may also pay for skilled care in nursing homes only for a short period while you are recuperating after a hospital stay for a certain condition. Once your care needs are minimized and you need custodial or personal care, the other health care insurance covers may not pay these costs.  

Limited savings to cover your long-term care needs

Some studies indicate that a 65-year person has at least a 70 percent chance that they will need long-term services at a certain period. Because you can need long-term care for various reasons, it can be hard to figure out whether or not you may need it. Therefore, it’s a good idea to buy it when you still have good health, which can be in your 50s rather than waiting until you are older or ill as it can become quite unaffordable. You can also pay lower premiums when you are younger.

There are several types of long-term care. This includes help with daily activities, full care in private nursing homes, and many more. The costs of these services can depend on the type of care you need. With the rise in the costs for long-term care, your retirement savings cannot be enough to cover such expenses.

As explained earlier, the costs can depend on various factors. Long-term care providers can also consider the level of coverage your insurance policy can pay out when you want to use it and your age. 

Types of long-term care insurance policies

A typical and traditional long-term care insurance policy can pay a predetermined amount of money for each service you receive in a nursing home. There can usually be a limit to your benefits you receive which can be based on the amount or number of years. A plan that provides pooled benefits, which means a plan that covers various types of long-term care services, can set a total amount for the multiple services you receive.  

Today, there are new types of long-term care insurance policies that tend to extend beyond the traditional insurance policies. And, most of them have seen premium increases. You can also opt for hybrid life and long-term insurance. This policy usually combines long-term care insurance and permanent life insurance and gives more options.

Alternatively, you can choose a universal life insurance policy that has a long-term care insurance rider. This one can be great for you when you want a meaningful death benefit for all your beneficiaries once the long-term care insurance is not required.