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Long-term care insurance can help minimize the financial and emotional effects of a long-term health problem — such as Alzheimer’s disease, dementia or stroke — by paying for care if you become physically or mentally unable to provide for your own safety or well-being. It covers a variety of services to help you maintain your standard of living in your own home or in a nursing home.
Long-term care insurance is useful for:
- Protecting assets and income.
- Staying independent of financial support from others.
- Maintaining options in selecting types and places of care.
- Feeling secure that you are covered if you need long-term care.
Long-term care can include medical care. However, it is typically custodial care, which most health insurance and government programs either do not cover or severely limit.
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Three levels of long-term care are available.
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| Skilled |
- Needed for individuals with medical conditions requiring continuous care by medical personnel.
- Care may include physical, occupational, respiratory and speech therapy from
a licensed professional.
- Daily care is usually 24 hours and must be ordered by a physician.
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| Intermediate |
- Provides rehabilitation for individuals to regain independence following an illness or accident.
- Requires the attention of a registered nurse or professional therapist.
- Does not require 24-hour supervision.
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| Custodial |
- For individuals needing help with simple daily tasks such as eating, bathing or dressing.
- Requires less attention than skilled care.
- Care may be provided in a home rather than in a nursing home facility.
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About Premiums
Long-term care insurance policies can be purchased through private insurance companies, an insurance agent or possibly through your employer. Consider the following.
| Factors |
Premiums typically are based on your age, health and type of coverage.
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| Costs of care |
Make sure the long-term care insurance policy you buy will cover the costs
of care when you plan to use it. Nursing homes and assisted living facilities charge widely varying rates from state to state.
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Guaranteed
renewable |
Most long-term care policies are guaranteed renewable — they cannot be
canceled as long as premiums are paid. However, premiums may increase as
long as the insurer raises them for an entire class of policyholders. Determine
under what conditions a company can cancel a policy or raise premiums.
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To Lower Costs
- Consider purchasing long-term care insurance during preretirement planning. You are likely to qualify for better rates when you are younger and in better health.
- Buy a policy with a longer waiting period before benefits begin. Save enough money to pay for care during the time when you are not receiving benefits.
- Consider buying a joint policy for you and your spouse.
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