What is long-term care insurance?

What does long-term care insurance cover?

Long-term care insurance covers eligible care services that help you manage daily activities or meet ongoing care needs. Depending on your policy, benefits include personal care, skilled nursing, therapy, and care at home or in a facility.

Long-term care insurance covers the cost of:

Skilled nursing
Help with daily functions such as bathing and dressing
Therapy, including occupational, speech, or rehabilitation

Most long-term care insurance policies cover these things in a variety of settings, including nursing homes, rehab centers, and even in your own home.

Policies vary widely in cost and coverage levels. Premiums depend on the type and amount of services you want covered, your age and health when you buy the policy, and optional benefits such as inflation protection.

Long-term care insurance policies include coverage limits. Policies may cap how much they pay over your lifetime and how much they pay per day or per month for care. Some policies also limit the number of years they cover for long-term care. Typical time periods range from two to five years.

What are the options for long-term care insurance?

You have several long-term care insurance options, including policies with different benefit limits, coverage periods, and care settings. Many comprehensive policies cover services at nursing homes, assisted living facilities, adult day care centers, and your own home. Some also cover care at specialized memory care facilities.

You can also add additional benefits, known as riders. An inflation protection rider increases your policy's benefit amounts over time to help keep pace with rising long-term care costs. This added protection affects your premium.

Many policies also pay for services and equipment to help you live at home, such as electronic monitoring systems, wheelchair ramps, transportation to medical appointments, and training for a friend or relative to provide care.

Some policies even pay family members or friends who care for you. Another common benefit is a care coordinator who meets with you and then arranges and monitors care.

Another way to plan for long-term care expenses is insurance and long-term care insurance.

FAQ: Long-term care insurance

How long does long-term care insurance pay benefits?

Your policy determines how long benefits last. Common benefit periods include two, three, four, and five years, while some policies offer different limits. Your total benefits also depend on the policy's daily or monthly payment limit.

What is the difference between long-term care insurance and health insurance?

Health insurance primarily covers medical services, while long-term care insurance helps pay for ongoing assistance with daily activities. Traditional health insurance generally doesn't cover extended custodial care.

Is long-term care insurance worth it?

Long-term care insurance is worth considering if you want to protect your savings from the cost of extended care. Whether it fits your needs depends on your income, assets, health, expected retirement expenses, and ability to afford premiums over time.