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What Does Long-Term Care Insurance Cover?

No one wants to think about the possibility of someday becoming so sick, frail, or disabled that we can no longer take care of ourselves. But if that should ever happen — and it happens for about 20% of people over age 65, and about 55% of people over age 85 — long-term care insurance may help defray costs so you can live the best life possible. Here are answers to some of the most common questions about long-term care insurance, from the U.S. Department of Health and Human Services:

1.  What is long-term care insurance?

Long-term care insurance specifically covers the costs of long-term care services, most of which are not covered by traditional health insurance or Medicare.

2.  I have decided that I will never go into a nursing home, no matter what. Do I really need long-term care insurance?

Long-term care insurance can be used for a variety of different types of health care, not just nursing homes. In fact, having long-term care insurance may help keep you out of a nursing home. According to an article in TheNewsStar.com, the right kind of long-term care insurance will pay a qualified person (or organization) to provide needed long-term care for you in your home. That could be the difference between your caregiver being able to keep you at home… or having no choice financially, physically, or emotionally but to put you in the only place that can provide the right kind of help — in a nursing home.

3.  What does long-term care insurance cover?

There are a wide variety of types and amounts of coverage available. Before you sign on for long-term care insurance, make sure you understand exactly what you will be entitled to receive, what your maximum coverage will be, and what out-of-pocket expenses you will need to take care of yourself. Some options you will be able to choose include:

  • A daily benefit — the maximum daily amount of expenses for care the policy will pay. Most policies let you choose from $50/day to as much as $500/day.
  • Maximum Lifetime Benefit — the total amount you can get the policy to provide. Policies typically offer a choice of lifetime dollar amounts – for example $100,000 or $300,000. Some insurers also sell “Lifetime” or “Unlimited” coverage that has no dollar limit; you receive benefits as long as you continue to need long-term care and receive covered services.
  • Coverage type — may include comprehensive care, which covers a wide range of care settings and services (including care at home, respite care, adult day care centers, and long-term facilities); or facility care only, which covers care in nursing homes or assisted living facilities only. Facility care only policies are quite limited, but also less expensive.
  • Available riders — allow you to customize your coverage. For example, an Inflation Protection rider protects you from the rising cost of care over time. Be sure to ask about which types of riders are available so you don’t miss out on something you might want or need to include in your insurance policy.

4.  What is NOT covered by long-term care insurance?

There are always exclusions, which are listed in the paperwork that will be part of your policy, so be sure to read everything carefully. Typically, these items are excluded:

  • Care or services provided by family member, unless the family member is a regular employee of an organization that is providing the care…provided the organization they work for receives the payment.
  • Care or services provided outside the United States. However, a growing number of policies now have an international care benefit.
  • Care or services that result from war or act of war.
  • Care or services that result from an attempt at suicide, or an intentionally self-inflicted injury.
  • Care or services for alcoholism or drug addiction.
  • Treatment provided in a government facility (unless otherwise required by law).
  • Services for which benefits are available under Medicare or other governmental program (except Medicaid), any state or federal workers’ compensation, employer’s liability or occupational disease law, or any motor vehicle no-fault law.

5.  Is everyone eligible for long-term care insurance?

In short, no. While each insurance company has a different standard, it may be difficult or impossible to get coverage if you:

  • currently use long-term care services or already need help with Activities of Daily Living (such as dressing or feeding yourself);
  • have AIDS or AIDS Related Complex;
  • have dementia or Alzheimer’s disease;
  • have a progressive neurologic condition, such as multiple sclerosis or Parkinson’s disease;
  • have a history of strokes, or had a stroke within the last 24 months;
  • have cancer that has spread beyond its site of origin.

6.  Where can I go for more information?

There are lots of resources available. The best sources of information are provided by organizations that are not affiliated with an insurance company, and which have nothing to benefit from you purchasing insurance (or not).

For general information about long-term care insurance:  www.longtermcare.gov

To find out which insurance companies offer long-term care insurance, look up your state’s Department of Insurance:  State and local consumer agencies

Be aware that long-term care insurance isn’t for everyone…you need to examine the pros and cons for yourself and your situation. Don’t let anyone pressure you into buying more or less insurance than you think you need. Remember that there are many different insurance companies and insurance brokers–if you don’t feel comfortable dealing with one, find another.

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