Long-Term Care Insurance Explained

Long-Term Care Insurance

The cost of long-term care can be a costly business, especially when a loved one has been diagnosed with an illness at a younger age or was born with a disability that requires regular medical attention within a medical facility.

What Is It?

Long-term care insurance, also known as LTC, is coverage that essentially provides nursing home care, adult daycare, personal daycare, and home healthcare for individuals who are aged 65 or older. Additionally, long-term care also covers adults who have a chronic illness or serious disability that requires round-the-clock medical care and attention. LTC is a private kind of insurance policy that is available to anyone who has secure financial backing. 

LTC vs. Medicaid

Medicaid is by no means synonymous with long-term care insurance, and this fact can catch people out when it comes to trying to make a claim. Medicaid is essentially a state-run program offering low-cost, or on occasion, completely free, medical and custodial services to those citizens of America who have lower incomes. Many older adults use Medicaid to pay for long-term care in nursing homes and often in assisted living facilities as well. Long term care insurance offers a significantly higher level of flexibility and a larger range of options than Medicaid. 

LTC Insurance Costs

The following factors might affect the cost of your long-term care policy:

  • The maximum lifetime amount the policy will pay
  • The maximum amount that the policy will pay per year
  • The maximum number of days that the policy will pay
  • Any additional optional extras or benefits you may choose
  • The age of the policyholder themselves

The American Association for Long-Term Care Insurance state that a married couple in their late 50’s can purchase a brand-new policy for around $3,200 a year, with the combined benefit of the plan would total around $780,000. It is crucial to remember that some policies may place a finite date on the payout period and if there is a limitation in place that usually ranges between two and five years. More costly long-term care policies may well offer a lifetime benefit structure. 

LTC Facts

With around 70% of people over the age of 65 in the United States expected to need to use some form of long-term care during the later years of their lives, research shows that less than a third of Americans aged 50 and over have even begun to start saving for their later life. 

Therefore, purchasing long-term care insurance is something that needs to be considered well before you may need to use the policy. LTC, in essence, refers to a wide host of services that are not even slightly covered by standard medical insurance policies, such as assistance with routine, day-to-day chores, and activities like dressing, bathing and getting in and out of bed safely. 

A long-term care insurance policy will also greatly assist you in affording the costs and medical treatments that come with chronic illnesses such as dementia and Alzheimer’s.