Long-Term Care Insurance

Long-term care insurance (LTCI) is a product developed for the individual who desires insurance for long-term care in either a nursing facility, an assisted living facility or in their own home. Without LTCI, many people pay privately for their long-term care needs and this can become very costly. Medicare only covers certain medical expenses and limited amounts. Medicaid only becomes effective when a person has spent down most of their personal resources.

Since there is no national policy for LTCI, try researching the topic and talking to several companies before deciding whether you need the insurance and which is the best policy for you. Many personal considerations will come into play as you begin this process. These include:

  • What is my personal financial situation and do I in fact need LTCI for myself and/or my spouse?
  • When should I purchase a policy? It is often beneficial to begin researching 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 the 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?
    • 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 and 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.
  • Be very 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 make for a good start.

For more information on long-term care insurance, contact:

U.S. Department of Health & Human Services
Administration for Community Living

(SHIIP) Senior Health Insurance Information Program