Long term care insurance is a type of insurance designed specifically to cover the costs of long term care services, most of which are not covered by traditional health insurance or Medicare. These services may include help with activities of daily living, home health care, respite care, adult day care, care in a nursing home or in an assisted living facility.
Individuals buy long term care insurance for a variety of reasons. These reasons may include avoiding spending assets for long term care, making sure there are choices regarding the type of care received, protecting family members from having to pay for care, or decreasing the chances of going on Medicaid. An individual can select a range of care options and benefits that allow them to get the services needed in the settings that best suit them. However, long term care insurance can be expensive and may not be appropriate for everyone.
The cost of a long term care insurance policy is based on an individual's age when purchasing the policy, health status, the type and amount of services to be covered, and any optional benefits selected. If an individual is in poor health or already receiving long term care services, they may not qualify for long term care insurance, or may only be able to buy a more limited amount of coverage, or buy coverage at a higher "non-standard" premium rate.
With long term care insurance, premium rates are not guaranteed. If an individual purchases a long term care insurance policy, they may have to pay annual premiums for ten to thirty years, depending on how long they live. Their premium may increase substantially over time, making it more difficult to afford. An individual generally should not buy a policy if they cannot easily afford the premium now or in the future.
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