Long-term care insurance: the basics
Long-term care insurance is a private policy that can help pay for care over months or years. This guide explains what it covers, what to read in a policy and other ways families plan.
General information only. This guide is not medical, legal or financial advice. Talk with a physician, and with an elder-law or financial professional where money or legal papers are involved, about your own situation.
What long-term care insurance is
Long-term care insurance is a private policy that helps pay for care when a person needs ongoing help with daily life. Medicare and most health insurance do not pay for most of this care.
Premiums depend partly on age and health when you buy, and cost more for older buyers. Some employers offer group plans.
What policies often cover
Many policies cover care in several places, including the person's home, an assisted living community or a nursing home. The exact coverage depends on the policy.
Coverage often centers on help with daily activities. For a tax-qualified policy, a licensed health practitioner certifies one of these:
- Being unable to do at least two daily activities without substantial help, for at least 90 days
- Daily activities here mean eating, toileting, moving in and out of a bed or chair, bathing, dressing and continence
- Needing close supervision to stay safe because of severe memory or thinking problems
What to read in a policy
Policies differ a lot, so read the terms before you buy and ask the insurer about anything unclear.
- The waiting period: many policies ask you to pay for the first 30, 60 or 90 days of care yourself
- The benefit period: many policies pay for a set number of years, then the cost is yours
- Whether benefits rise over time to keep up with the cost of care, and what that adds to the premium
- Whether the premium can go up after you buy
- Who can give care at home, such as only an agency or also a family member
Other ways to plan
Long-term care insurance is one of several ways to plan. Many families combine sources, depending on their money and the care they use.
A SHIP counselor can help with Medicare and Medicaid questions. Your state insurance office has information on long-term care and life insurance.
Some choices affect taxes and inheritance, so a financial professional may help.
- Savings, a pension or the sale of a home, often used for at least part of the cost
- Medicaid, which covers some long-term care for people with limited income who qualify in their state
- Some life insurance policies that can pay part of the benefit early to help with care
- Combination policies that join life insurance and long-term care coverage
Frequently asked questions
No. Medicare does not pay for most long-term care, and Medigap generally does not either. Long-term care insurance is a separate, private policy.
Often it is harder. People already in a care setting, needing help with daily tasks or in poor health may not qualify for a new policy.
Many policies cover care at home. Some pay only for professional care, while others may pay a family member. Ask the insurer what your policy allows.
Sources
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