All About Long-Term Care Insurance
Long-term care insurance is distinct from and supplemental to health insurance. Like health insurance, plan members pay regular ongoing premiums. Once the need for home health, assisted living, nursing or memory care becomes evident, they can use their policy toward their long-term care expenses.
Benefits of LTC Insurance
The benefits of long-term care insurance are clear. If your loved one lives long enough and requires some kind of assistance in her elder years, both she and your entire family will be shielded from the potentially debilitating cost of such services.
Risks of LTC Insurance
There are risks to opting for nursing home insurance. For one, there is always a chance that your loved one will never require in-home or nursing care. In addition, he may never meet the specific requirements his LTC insurance policy delineates in his contract. While there is little you can do about the first issue, the second is easily remedied with a careful reading of the contract. Language such as hands-on assistance and continual supervision are more restrictive, whereas standby assistance and presence of another individual are more lenient.
When to Steer Clear of Nursing Home Insurance
It is a bit of a catch-22 that those who get most excited about the potential savings available in a long-term care insurance policy are often the very ones who would be wise to walk away. LTC insurance premiums are costly. Those who can comfortably afford them are often in a place to pay for their own assisted living costs and may prefer to have the added freedom afforded by free-agent assisted living shopping.
If your loved one has limited assets, has trouble paying for regular living costs, relies solely on social security as income, or could not afford a premium increase of at least 20 percent, she should think twice about nursing home insurance. If your loved one reaches 80 years of age before enrolling, her initial premiums will likely be prohibitively high. Likewise, applicants with health risks can be denied coverage or charged higher premiums. Contact potential insurers or your insurance broker for plan specifics.
When LTC Insurance Is Right for Your Loved One
If your loved one has significant assets (over $300,000 beyond the value of his home), is around or under age 70, and enjoys relatively good health, long-term care insurance could be a sound investment. Statistics show that around half of the population will spend some time in a nursing facility, but you need to determine for yourself if the length of stay and cost of services are worth the premiums you'll have to pay in the meantime.
Above all, if you choose to pursue LTC insurance, read and comprehend the fine print in the contract. Elimination periods, benefit qualifications, daily/yearly benefit caps, inflation protection clauses and lifetime limits all play significant roles in any given policy. For more help determining whether nursing home insurance is right for your loved one, go to the National Association of Insurance Commissioner's (NAIC's) special section on long-term care.
Find That Perfect Assisted Living Home
If, after reading this, you decide to pursue assisted living care without opting for long-term care insurance first, feel free to call the number at the top of this page to speak with one of our expert elder care advisors free of charge. They will walk you through the process from beginning to end, connecting you with affordable assisted living options in your area. For additional information about paying for elder care, see our other articles on Medicare, Medicaid and general payment information.