How Much Do You Know About Long-Term Care Insurance?

​Long-term care insurance can serve as a powerful safety net for people who become gravely ill or injured. But most people believe this insurance is for someone else, not themselves. They wrongly believe they either won't need long-term custodial care or don't want to think about it right now.

When is the best time to buy long-term care insurance?
The American Health Care Association recommends purchasing long-term care insurance well before you are most likely to need it, and early enough to save some money on premiums. If you are paying $1,000 yearly for a long-term care policy at age 55, you'll pay nearly twice that if you wait until age 65 to purchase it.

How do insurance companies decide when you are eligible for long-term care benefits?
Under most policies you are eligible for benefits when a doctor certifies that you cannot perform at least two ADLs for 90 days or more. Also, with tax-qualified plans you may be eligible for benefits when a doctor certifies that you need "substantial supervision" as protection for your health and safety due to cognitive impairment.

What is the first ADL (activities of daily living) that people have difficulty with?
Research shows that bathing is usually the first ADL a person cannot accomplish without help. But some policies do not include bathing as a primary ADL, so it is worth checking when you purchase your policy.

If you are unable to perform some of ADLs, but have no identified medical condition, will you qualify anyway?
Ordinarily, tax-qualified long-term care policy benefits are triggered by a medical condition where a doctor certifies you cannot perform at least two ADLs, without help for at least 90 days. If you are just temporarily unable to perform two or more ADLs, then you may not qualify for benefits.

Do ALL long-term care policies include coverage for Alzheimer's disease? 
Policies issued since 1997 are generally required to provide coverage for Alzheimer's disease as a cognitive impairment. There are some policies, which are deemed non-tax qualified, that may not cover Alzheimer's. Be sure to check your policy to verify this coverage.

Must you be a resident of a nursing home to begin receiving long-term care benefits?
Good long-term care policies pay for several levels of care, including nursing home, assisted living and home care.

What services are covered under most long-term care policies?

• Residential hotels with meal service. 
• Assisted living facilities where personal attention helps residents with personal care activities they cannot do without assistance. 
• Licensed nursing care, speech, physical or occupational therapy and health aides. 
• Nursing facilities, that is, residential sites for people needing daily medical care.

 
Should everyone purchase long-term care insurance?
If you have significant assets and income you want to protect and you desire to maintain your independence, then you should purchase long-term care insurance.
​
Those who have limited assets and income shouldn't spend money on long-term care insurance. Fortunately, the U.S. still has at least minimal systems to care for those without substantial means, and compromising an already spartan lifestyle to purchase long-term care coverage does not make good sense.