Lincoln ElderCare Resource Handbook: Long-Term Care Insurance

Long-Term Care Insurance

Long-Term Care Insurance (LTCI) was developed to cover long-term services and supports, including personal and custodial care in a nursing facility, an assisted living facility or in an individual’s home. Long-Term Care Insurance reimburse policyholders a daily amount (up to a preselected limit) for services to assist with activities of daily living such as dressing and eating. The policyholder can generally select from a range of care options and benefits that allow them to get the services they need, where they need them. Without LTCI, many people pay privately for their long-term care needs and this can become very costly. Medicaid only becomes effective when a person has spent down most of their personal resources. Medicare only covers certain medical expenses and for a limited time.

If the individual is in poor health or already receiving long-term care services, they may not qualify for LTCI. In some cases, they may be able to buy a limited amount of coverage or buy coverage at a higher “non-standard” rate. Since there is no national policy for LTCI, it is wise to research the topic and talk to several companies before deciding whether the insurance is needed and which policy is best for you. Many personal considerations will come into play during this process.
These include:

What is your personal financial situation and do you in fact need LTCI for yourself and/or your spouse?

When should you purchase such a policy?

• It is often beneficial to begin consideration and research into LTCI between the ages of 45 and 60.

When you do start shopping for a policy, we suggest you consider the following:

• What services are covered? Does the policy provide for home health care and assisted living facilities as well as for nursing homes?
• What are the daily benefit amounts available? What amount will be needed to meet your particular needs?
• What is the waiting period before benefits begin?
• Are you required to have an assessment of activities of daily living, a physician’s certification of need or a prior hospital stay before benefits can be redeemed?
• What is the benefit pay out period: 2 years, 4 years or lifetime?
• Is there an inflation clause built in and what is that percent factor?
• Is there a maximum lifetime benefit?
• Have any complaints been filed with the Department of Insurance against the company?

It is helpful to research current prices of senior living options along with home health care companies to determine the level of policy one would need in order to be able to afford the type of care desired.

Very important: Be sure to understand the criteria required by the insurance company to be eligible for benefits.

These are by no means all the things to consider when making this decision but they can make for a good start.

For more information on Long-Term Care Insurance, contact: