A Close Look at Long-Term Care Insurance

Long-term care insurance can be an important planning tool, helping individuals protect their assets in the event they need to enter a nursing home or assisted living facility.

The costs of long-term care insurance vary widely, depending on  your age when you obtain the policy, how much the policy will cover (usually a certain dollar amount per day), and how long the policy will pay for care. Other policies may provide coverage  until a maximum dollar amount has been expended. Long-term care insurance will cover expenses that traditional Medicare and health insurance don’t, such as medical care in the home, longer-term care at a nursing home, and assisted living costs.

The time to start looking into a long-term care policy is when you are in your fifties, since your premiums will be lower at that time. A long-term care insurance policy will go into effect when the policy holder is unable to perform one or more activities of daily living, such as bathing, dressing, eating, or walking.  Because policies vary regarding how many activities of daily living you must be unable to perform before coverage will begin, you should carefully check such stipulations before making a purchase.

There are several questions you should ask when looking for a policy:

• Where can the care be provided? Most policies will cover care in your home, a nursing home, or assisted living facility.  You will want to choose a policy that has flexible options.
• What types of caregivers can be paid by the policy? This is important information, since it will detail whether or not the policy would include someone who could assist with laundry and meal preparation.
• What illnesses are covered? Be sure that illnesses such as Alzheimer’s aren’t excluded from coverage.  Before purchasing any policy, read the full list of exclusions.
• Does the policy provide inflation protection? What the policy provides may seem like adequate coverage now, but it may not be enough in 20 years if it doesn’t keep up with inflation.

Paying for in-home or nursing home care privately can exhaust a person’s resources rapidly. Obtaining long-term care insurance may allow you to remain in your home far longer than otherwise possible and will also help ensure that your family doesn’t become impoverished by the cost of care. Ultimately, long-term care insurance can allow you to preserve your estate so that you have more to pass on to your heirs.