Long-term care insurance (LTC or LTCI), is an insurance product that helps provide for the cost of long term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare or Medicaid. Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.
Age is not a determining factor in needing long-term care. About 60 percent of individuals over age 65 will require at least some type of long-term care services during their lifetime. About 40% of those receiving long-term care today are between the ages of 18 and 64. Once a change of health occurs long-term care insurance may not be available.
Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to seven days a week, 24 hours a day (up to the policy benefit maximum).
Another benefit of long term care insurance is that individuals may feel uncomfortable relying on their children or family members for support, and find that long-term care insurance could help cover out of pocket expenses. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
Long-term care insurance rates are determined by six main factors: the person's age, the daily (or monthly) benefit, how long the benefits pay, the elimination period, inflation protection, and the health rating (preferred, standard, sub-standard). Most companies will offer couples and multi-life discounts on individual policies. Some companies define “couples” not only to spouses, but also to two people who meet criteria for living together in a committed relationship and sharing basic living expenses. The average age of purchasers has dropped from 68 years in 1990 to 61 years in 2005, and the number of purchasers who are under age 65 has increased significantly.
There are many different benefit options that can be added to a long term care policy. To get more information and discussion on your specific needs, see your local independent insurance agent.