What Is Long Term
Care Insurance?

What is long term care insurance? It's an insurance policy that covers intensive care provided in your home or a care facility in case of debilitating illness or chronic disability. Here's what you should know about purchasing long term care insurance:

  • Evaluate your likelihood for future care
  • Consider whether your financial circumstances make it worthwhile to purchase coverage
  • Consider purchasing coverage in middle age
  • Carefully review the deductible, premiums, covered services, and other information to make the right choice.

Before deciding on whether you or a family member would benefit from long term care insurance, it's important to answer the question: What is long term care? Many people think of this as a type of care provided only for the elderly. In reality, it is a form of specialized care for people with chronic disabilities or long term illnesses. The elderly are disproportionately affected by the need for long term care because of the illnesses that so often accompany aging.

Long term care is essential for helping people suffering from a serious illness or a disability to meet their basic care needs and live as normal a life as possible. Unfortunately, standard health insurance often does not cover the cost of long term care. Medicaid will sometimes cover the cost, but only after an individual has already exhausted a great deal of his or her own savings.

You might be asking yourself: what is long term care insurance, and what kinds of services does it cover? In general it will cover the costs of helping the patient at home with the activities of daily living, like household chores, personal hygiene, and grooming. Long term care insurance can also provide coverage for care provided in other kinds of facilities, like adult day care, nursing homes, and traveling nurse services.

Unfortunately, by the time a person actually needs long term care insurance, they may present too high of a risk to the insurance company, so coverage may not be offered. This is why it's important to understand what long term care is, and to plan ahead for care issues that may arise in the future. In general, it's a good idea to buy long term care insurance during middle age. If you buy it younger, you'll be spending unnecessary money on premiums during a time when you aren't likely to need care. On the other hand, buying during middle age when you are still in good health may afford the best opportunity for an affordable premium.

How will you know if long term care insurance is right for you? If you have significant assets to protect in the event of a catastrophic illness or disability, long term care insurance is a good option. It's a way to have care available without having to exhaust all of your assets, while minimizing the financial burden on your family when it comes to providing the care you need as you get older.

But, it's important to evaluate the costs versus the actual risk of needing to deplete your assets to cover long term care. In general, a 65-year-old adult in good health will pay about $2,000 to $3,000 for a long term care policy. If the cost of a policy will make it difficult to pay your costs of living, you may not want to pursue it. You should make sure that you could continue to pay your premium in the future should your income decrease for any reason.

Finally, when it comes to choosing a long term care insurance policy, review the terms carefully for exclusions, deductibles, and waiting periods. You'll want to make sure you understand fully what the policy does and does not cover, whether your premium is locked for the term of the policy (except for adjustments for inflation), and what your out of pocket deductible will be in the event that you end up using the policy.

By carefully considering these factors, you'll begin to understand what is long term care insurance and be able to make the best choice for you and your family.


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