Understanding Long Term Care Insurance

When asked to imagine your future, most people don't picture themselves needing help with everyday tasks like getting dressed, preparing meals, or moving around the house. But as we age, needing some level of long-term care becomes a reality for many.

A fall, a stroke, or a diagnosis like Alzheimer's can quickly change daily life and the cost of long-term care can add up just as fast. It's during these moments that families begin asking questions they wish they had considered sooner.

If you've ever wondered whether long-term care insurance is worth it, you're not alone. In this guide, we'll explain what long-term care insurance is, how it works, what it typically costs, and the pros and cons to help you decide whether it's the right choice.

Long-term care insurance is a specialized policy designed to assist with the cost of extended care services that are not typically covered by health insurance or Medicare.

Individuals pay premiums over time to offset future care needs. Once eligibility requirements are met (explained below), the policy provides financial assistance with long-term care expenses related to aging, illness, injury, or a chronic condition.

While regular health insurance is meant for doctor’s visits and hospital stays, long-term care insurance helps with:

The cost of long-term care insurance depends on several personal factors, so there isn't a set price. Your premium is based on age, general health, and options you select. Purchasing a policy earlier in life can help you secure lower premiums.

Other aspects affecting cost include:

Long-term care insurance isn’t the right choice for everyone. For some, it provides valuable protection by helping preserve savings, keeping retirement plans on track, and reducing the financial impact that long-term care expenses have on their family. For others, the premiums are may feel like an unnecessary expense on the chance you will use the benefits.

Long-term care insurance is worth considering if you:

Understanding how long-term care insurance works can help you know what to expect when it's time to use your policy. While every policy is different, most follow a similar process for determining eligibility, when benefits begin, how premiums are handled and the amount of coverage available.

Long-term care insurance benefits become available when an individual meets the policy’s requirements for needing care. Policies require that a person experience a qualifying event before benefits can be used.

Quality events include:

Each policy has a period of time you must wait after becoming eligible, before benefits begin paying for covered services.

This functions similar to a deductible, but based on time rather than money. During this period, you are responsible for covering the cost of your care out of pocket.

Elimination periods range from 30 to 180 days, depending on the policy you choose. Longer periods mean lower monthly premiums.

This is a feature included in many policies. A waiver allows you to stop paying your premium once you qualify for benefits and complete the elimination period. Otherwise, you must keep your premiums current to keep receiving the benefits.

Even with a waiver premium payments resume when you recover and no longer qualify for benefits.

Long-term care insurance policies include limits on how much is paid care. Depending on the policy, benefits may be provided as a daily, weekly, or monthly amount, with some policies also offering a total lifetime benefit.

If your cost of care exceeds your policy's benefit amount, you are generally responsible for paying the remaining balance out of pocket. Choosing a policy with benefit limits that align with the expected cost of care in your area can help reduce future out-of-pocket expenses.

Understanding how your specific policy works is an important part of planning for future care needs. The following sections cover some key considerations to keep in mind when initially purchasing coverage.

One of the biggest challenges with understanding long-term care insurance is knowing exactly what your policy covers. Since every policy is different, it is important to carefully review the details of any plan you are considering.

Figuring out how and when to use your long-term care policy is very difficult. That is where we can help. Our team of extensively trained nurses assist seniors with understanding and activating their long-term care policies.

The process starts with a complementary on-site visit to perform a verification of benefits call to your insurance carrier. During this call, the nurse will gather information about benefits and discover which Activities of Daily Living deficits will trigger coverage.

The nurse will help you understand the elimination period, and the process of activating the policy. Then during care, we work with a third-party who will set up direct billing with your carrier, saving you time and frustration.