FAQs About Long Term Care Insurance

What does long-term care insurance cover? 

Long-term care insurance usually pays for skilled, intermediate, or custodial care in a nursing facility. It can also cover professional "at-home" health care. This type of insurance can help pay for a variety of home and community-based care services, including physical, speech, and occupational therapists; home health aides and visiting nurses; adult day care; and hospice care.

(Note: Generally, skilled care refers to round-the-clock treatment by a registered nurse under a doctor''s supervision. Intermediate care refers to occasional nursing and rehabilitative care under the supervision of skilled medical personnel. Custodial care primarily meets personal care needs in activities of daily living such as help in eating or bathing.)
 
How do long-term care insurance policies work?

Typically, long-term care policies pay up to a specific dollar amount for covered services per day, reimbursing policy owners for expenses incurred. Few, if any, policies provide full coverage for all expenses. Annual premiums for long-term care insurance policies can range from $250 to over $2,500 depending on age, waiting periods, and the duration and amount of benefits.

Just what does a good policy include? 

No matter what your needs are, there are certain things to look for in long-term care insurance. Be sure the company offering the policy is financially secure. Most libraries have this information available from independent ratings agencies; otherwise, ask your agent. Keep in mind that premiums can be costly depending on age. Find the level of coverage that is affordable yet still offers what's most important to you. For example, if you are concerned about the possibility of being unable to care independently for yourself in the future, and you don't feel comfortable having to rely on a stranger to do so, then make sure that your policy provides benefits allowing a friend or family member to come in and take care of you. Or, if you do not anticipate needing long-term health care services for several years, you may want to consider purchasing an inflation protection option. And no matter what, you will want a policy that waives premiums while you are receiving nursing home and/or home health care benefits.

[Note: As of January 1, 1997, federal legislation provides some tax advantages for long-term care insurance. Part of the premiums are now deductible as a medical expense.This applies to both existing and new policies ("qualified" long-term care insurance contracts) that meet the federal standards.]

Long-Term Care Insurance Policy Checklist