Long-term care insurance (LTCI) offers a range of services and support for those challenged by performing daily activities such as bathing or showering, dressing, getting in and out of bed or a chair, walking, using the toilet, and eating. According to the Administration for Community Living, nearly 70% of 65-year-old people will need long-term care services or support.

Why consider LTCI? Well, it may be an option because traditional Medicare does not cover most long-term care, either in-home or at nursing or assisted living facilities. Medicare Advantage may provide limited services and Medicaid has income restrictions. Paying for LTCI helps ensure you can cover the high cost of personalized, in-home care.

LTCI works similarly to other insurance policies – customers pay a monthly or annual premium, and services are covered as needed. These services can include in-home help for basic personal needs such as eating and bathing, meal preparation and cleaning, transportation, or ongoing care at assisted living facilities or nursing homes. The amount of coverage, lifetime maximums, and waiting periods vary by policy. 

National Monthly Median Costs in 2021:

Assisted Living: $4500/month
Home Health Aide: $5148/month
Private Room in a Nursing Home Facility: $9034/month

Genworth Cost of Care Survey

When considering whether to buy LTCI, it is important to know the following:

  • Premiums vary and will be influenced by age, health, gender, and marital status among other factors.
    • In some cases, underlying health conditions and age may make it impossible to get long term care insurance.
  • Premiums aren’t guaranteed to stay the same. 
  • If you stop paying premiums, you usually lose the coverage.
  • Traditional long term care insurance is a use-it-or-lose-it proposition. You will not receive any type of payout if you don’t use the benefit. 
    • Some hybrid policies bundle life insurance and long term care together to address this. Read more
  • Many Long Term Care Insurance policies have limits on how long or how much they will pay. 

Like all types of major financial decisions, choosing whether to get coverage and what type of coverage is best done in consultation with professionals. More information about long term care insurance can be found through the National Association of Insurance Commissioners and The Administration for Community Living

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