About Long-Term Care Insurance
We never know what lies ahead. Long-term care insurance is designed to help individuals and their dependents plan for the unexpected and help protect against the high cost of care and services associated with a severe illness, injury, or supervision due to a cognitive impairment.
If people are unable to care for themselves, long-term care insurance can assist in covering the cost of long-term care services provided at home, an adult day center, an assisted living facility or a nursing home—essential everyday care like help with eating, dressing and bathing. Certain conditions, such as severe cognitive impairment or inability to perform a certain number of activities of daily living, determine when the insured person will receive benefits, subject to an assessment by an insurance company representative. Benefits vary with the term of the insured person’s policy, and the daily benefit may not equal the daily cost of care.
Should you or shouldn’t you purchase long-term care insurance? Here are some general rules of thumb, according to the National Association of Insurance Commissioners:
You should not buy long-term care insurance if:
- You cannot afford the premiums.
- You have limited assets.
- Your only source of income is a Social Security benefit or Supplemental Security Income (SSI).
- You often have trouble paying for utilities, food, medicine or other necessities.
- You are on Medicaid.
You should consider buying long-term care insurance if:
- You have significant assets and income.
- You want to protect some of your assets and income.
- You can afford to pay premiums, including possible premium increases, without financial difficulty.
- You want to stay independent of the support of others.
- You want to have the flexibility of choosing a specific long-term care setting.
Applicants must meet medical underwriting standards to be eligible for long-term care insurance. A person with a preexisting medical condition or addiction may be denied coverage or be subject to stricter terms. Individuals with existing health problems that indicate the likely need for long-term care—for example, Alzheimer’s disease or Parkinson’s disease—probably would not be able to buy a policy, according to NAIC. Check with the state insurance department in the state in which the potential policyholder resides since some states do not permit certain exclusions.
A licensed professional can help you select the right policy, the right benefits and the right carrier.
For more information about long-term care, connect with the Alzheimer’s Foundation of America’s licensed social workers. Click here or call 866.AFA.8484. Real People. Real Care.