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Long-term Care Insurance: The basics

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Long-term care insurance is what the name implies insurance to cover the cost of care in a long-term care facility such as nursing home care. Nursing home care is not covered by Medicare and most other insurance policies. Medicaid will cover the costs of long-term care but require the dissipation of assets to become eligible. Long-term care insurance allows you to maintain your assets and have the care you may need.

The types and kinds of Long-term care coverage available are varied. The cost of the premiums depends on the coverage you select, however the amount of the premium does not change once your purchase it. It is an expense that you can budget. Other factors that can affect coverage are:

  • Your age when you get the policy
  • Services you choose to have covered
  • Optional benefits you choose

There is also a choice of benefit periods. The usual benefit periods are two, three, four, five years and lifetime coverage. It is harder to find lifetime coverage or unlimited coverage options as the costs of nursing home care continue to escalate. The benefit periods of are often expressed in monetary limits such as 100 per day or maximum benefit of $100,000.

When considering long-term care coverage you should always consider a policy that has inflation protection. Inflation protection in long-term care acts the same way as inflation protection coverage acts in homeowner policies. Other popular options to consider for a long-term care policy are hospice care and assistance in the home for activities of daily living. Long-term care insurance is something everyone who is concerned about estate planning, protecting a spouse from potential poverty during retirement, and protecting future assets for their children should consider. Your state insurance commission is an excellent place to get information about companies that provide this type of insurance.

Sinclair Prosser Gasior
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