Long-Term Care Insurance

Long-Term Care Insurance

LTC insurance is distinct from any other type of health or life insurance. Like with health and life insurance policies, plan members pay regular ongoing premiums. However, with long-term care insurance, once assisted living, skilled nursing, in-home or memory care becomes necessary, plan owners can use their policy toward their long-term care expenses.

The Benefits of Nursing Home Insurance

When you purchase an LTC insurance policy for your loved one, you get the peace-of-mind that comes with knowing she will be taken care of regardless of her financial status. If her medical condition necessitates a move to a senior living home, both she and your entire family will be shielded from the brunt of the costs.

The Risks of Nursing Home Insurance

There are risks to opting for long-term care insurance. For one, there is always a chance that your loved one will pass away before old age. There is also a chance that she will never require in-home or nursing care. When these things happen, many nursing home insurance companies retain already-paid premiums with no benefit to your loved one or her survivors.

When to Steer Clear of LTC Insurance

Often, those who seek out long-term care insurance policies are the very ones who would be better off without them. Nursing home insurance premiums are costly, and those who can comfortably afford them are often in a place to pay for their own nursing home fees if they should require nursing care. These people might feel inhibited by the contractual obligations in their LTC insurance policies and regret purchasing them in the first place.

On the other hand, if your loved one struggles financially, long-term care insurance may not be a wise choice. A general rule of thumb is that anyone who cannot at any time afford a premium increase of at least 20 percent, he should think twice before enrolling.

Also, the older you are when you initiate your policy, the higher your premiums will be. Typically, starting coverage at 80 years of age or older can produce premiums that are prohibitively high. Likewise, applicants with significant health risks can be denied coverage or charged higher premiums. Contact potential insurers or your LTC insurance broker to learn more about plans that might work for you.

When LTC Insurance Is Right for Your Loved One

Generally, relatively healthy individuals under the age of 70 with significant assets (over $300,000 beyond the value of their homes) are best suited for long-term care insurance.

Regardless of your loved one's position, the most important thing to remember is to read the fine print on the contract fully. Familiarize yourself with terms like requiring continual supervision and hands-on assistance, which can seriously limit your loved one's ability to qualify for benefits. Keep your eye out for additional benefit qualifications, elimination periods, daily/yearly benefit caps, lifetime limits and inflation protection clauses, all of which play a significant role. For more help determining if long-term care insurance is right for your loved one, go to the National Association of Insurance Commissioner's (NAIC's) special section on long-term care.

Whether Or Not You Have Long-Term Care Insurance

Statistically, about 50 percent of the population will spend time in a nursing facility during their lifetime. But to determine whether or not LTC insurance is best for you and your loved one, you'll need measure your potential benefit against a quoted premium rate.

For additional information about paying for senior care, see our other articles on Medicare, Medicaid and paying for nursing home care. Or start planning for your loved one's future by talking to an elder care specialist using the toll-free number listed above.