Long-Term Care Insurance

How to help cover the cost of taking care of yourself when you no longer can.

You’re doing the hard work of saving so you can live the life you want in retirement. Long-term care coverage is the next step in helping you keep that lifestyle.

You may not realize that 70 percent of people age 65 and older will need some kind of help with everyday activities—like getting dressed or going to the doctor.1 Health insurance generally doesn’t cover this type of care and almost half of people who need long-term care spend over $107,000.2

It’s good to consider purchasing long-term care insurance while you’re still healthy, because you might not qualify for it later on if your health changes.

This allowed the workers to be involved in the job instead of feeling like they had been made redundant by technology.

Long-Term Care Prepare for the Future

Long-Term Care
Insurance 101

Did you know that neither your health insurance nor Medicare would pay for extended long-term care services in the event that you needed them in the future? If you develop a chronic illness or become disabled and can no longer care for yourself for an extended period of time, you’ll need long-term care services. Here are some answers to common questions about long-term care insurance to help you figure out if it’s right for you.

With many options to choose from, you can create a strategy that’s uniquely yours.

Traditional Long-Term Care Insurance

If you’re looking solely for long-term care coverage—something that covers in-home and facility care, or care by certified family members—this may be the best way to go. You’ll get the most comprehensive coverage for your money, and we’ll design a policy to include the type of care you want. People who choose this usually have their life insurance and retirement income needs covered.

Combination Long-Term Care and Life Insurance

This is our most versatile long-term care solution because it gives you long-term care coverage if you need it, life insurance if you don’t, or a little of both. You pay for a defined period of time, and it offers a money-back guarantee. Because your payments are being used to fund a few different benefits, you’ll get less long-term care coverage for your dollar than traditional long-term care insurance. 

Frequently Asked Questions

Long-term care insurance steps in if you develop a health condition that requires you to receive care and supervision. This could mean home health care, nursing home care or personal or adult day care. Many people mistakenly believe that Medicare or Medicaid would cover their care expenses, but this is often not the case. Without long-term care insurance in place, you may burn through your life savings or have no choice but to rely on a family member for care. Long-term care insurance is worth it because it protects your assets, spares your family from financial and emotional stress, and puts you in control of your health decisions.

There is no way to know for certain if you will someday require long-term care either in your home or in a specialized facility. But it’s likely when you consider that people are living longer than ever and that the U.S. Department of Health and Human Services reports that 69% of people will use long-term care services at some point.¹ Many people find long-term care insurance worth it because it offers peace of mind knowing that they won’t drain their assets or put undue pressure on family members.

There are three main types of long-term care insurance: traditional long-term care insurance, hybrid long-term care insurance and life insurance with a long-term care rider. Each type of coverage has different pros and cons worth considering.

Long-term care insurance typically covers both in-home care and care received at a specialized facility like an adult day care, an assisted living facility, a nursing home or a memory loss unit.

There are many variables that go into deciding how much long-term care insurance you need. They include your budget, you and your family’s health history, your financial situation and the cost of care where you reside. Also, because almost all long-term care insurance policies are bundled with life insurance coverage (or an annuity), you will also want to consider that coverage level as well. A licensed insurance agent can help you consider your options and make the best choice.

Today, most long-term care insurance policies come bundled with life insurance coverage. Because both long-term care insurance rates and life insurance rates generally increase with age, it’s best to start shopping for a hybrid life insurance and long-term care policy when you’re in your 40s or 50s. That said, you can still buy a policy if you’re in your 60s or older⁠—just know that you’ll probably pay more than someone who’s younger.

While the cost of long-term care varies by facility and by where you live, it’s safe to say the cost is considerable. Long-term care costs range from $19,240 per year for adult day care to $105,850 per year for a private room in a nursing home.² This kind of expense can quickly deplete your nest egg, which is why long-term care insurance is such an important coverage to consider. Many people are surprised to learn that long-term care coverage costs less than they imagined. You may even be able to deduct the cost of long-term care insurance premiums from your state and federal taxes.

There are three main options when it comes to getting a long-term care insurance quote and buying coverage. They include working with a licensed insurance professional, buying coverage through an employer-sponsored plan and buying coverage through an association or membership group like a trade association or alumni group. There are pros and cons to each of these three options.

Because almost all long-term care policies are now hybrid policies that also include life insurance coverage, you will want to review your policy whenever you experience a major life change like a marriage, divorce or death in the family. It’s also a good idea to review your coverage once a year with a licensed insurance agent. This is especially true if your long-term care coverage includes a compound inflation rider or a purchase option.

You first need to meet the elimination period before your long-term care insurance policy starts to pay for care. The elimination period can be thought of as a deductible measured in time instead of money. A typical elimination period for a long-term care insurance policy is 90 days. Once that is met, you typically need to experience either severe cognitive impairment or be unable to perform two activities of daily living such as dressing or feeding yourself.

Before you file a long-term care insurance claim, it’s a good idea to review your policy to make sure you met the elimination period and the conditions that qualify you for benefits. If everything checks out, you should contact the insurer and request a claim packet. It will contain paperwork that both you and your attending physician will need to fill out. Once the insurer reviews the paperwork, they will typically set up a phone interview with you (or your legal representative if you’re cognitively impaired). The insurer will then review all the information from the paperwork and the interview to determine if you qualify for long-term care benefits.

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