Long-Term Care Insurance 101

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.

Learn more about why long-term care insurance is worth it

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.

Learn more about how to decide if long-term care insurance is right for you

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.

Learn more about each type of long-term care insurance coverage

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.

Learn more about the kinds of care that long-term care insurance covers

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 financial professional can help you consider your options and make the best choice.

Learn more about deciding how much long-term care insurance you’d need

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.

Learn more about when to buy long-term care insurance

While the cost of long-term care varies by facility and by where you live, it’s safe to say the cost is considerable. National median costs for long-term care range from $24,700 per year for adult day care to $129,575 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.

Learn more about the cost of long-term care and why long-term care insurance is important

There are three main options when it comes to getting a long-term care insurance quote and buying coverage. They include working with a financial 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.

Learn more about them and how to buy long-term care insurance

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 financial professional. This is especially true if your long-term care coverage includes a compound inflation rider or a purchase option.

Learn more about how to manage your long-term care insurance policy

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.

Learn more about when long-term care insurance policies start to pay for care

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.

Learn more about how to file a claim for long-term care insurance