Long Term Care Insurance - 7 Frequently Asked Questions

When shopping for long term care insurance, be sure to ask the agent or company representative any questions you have to be sure you understand the coverage thoroughly. Here are the seven most frequently asked questions when buying LTC insurance.

Why Do I Need Long Term Care Insurance? I’m Never Going to Go Into a Nursing Home.

When they are healthy, many people plan to live out their lives at home and resist planning for nursing home care. Long term care insurance leaves residential care open as an option if care needs can’t be met in the home setting, and can also pay for in-home care and respite care.

Is Long Term Care Insurance for Me?

If you can afford the premiums and have income or assets, long term care insurance can help you protect those assets to use for other expenses associated with aging, or to pass on as an inheritance. People relying only on Social Security benefits or who have trouble paying for current necessities may want to avoid an additional expense. Medicaid recipients generally do not need long term care insurance.

Am I Too Old or Too Young for Long Term Care Insurance?

Long term care insurance is generally available for people ages 18-84. Premiums for younger applicants are lower, since they will likely be paying premiums longer before needing benefits. As long as you are in good health, you can qualify for long term care insurance until you turn 85.

What Does Long Term Care Insurance Cover?

Long term care assists people with day-to-day living even if they don’t require medical supervision. Long term care insurance pays for care provided in assisted living facilities, adult day care, nursing homes, and also includes hospice, respite care and home health care.

How Much Does Long Term Care Insurance Cost?

Premiums vary from company to company. A survey from the Health Insurance Association of America showed that the annual premiums for a basic long term care insurance policy, providing $100 daily benefit with no inflation protection, cost $300 at age 40, increasing to $1,002 at age 65 and $4,166 at age 79. Factors that increase premiums include:

  • Addition of nonforfeiture or inflation protection riders
  • Age and health of the applicant
  • Higher benefit amounts
  • Inclusion of a home health care option

Do I Need Long Term Care Insurance If I Have a Trust or a Plan for Medicaid?

A person with trust in place to protect assets may not need LTC insurance if that trust is updated at least annually by a lawyer who is familiar with changes made each year to the laws governing trusts. However, a trust that is not actively managed may not be effective when it is needed. People committed to a plan for Medicaid don’t need long term care insurance, but should be aware that Medicaid limits their options and choices for long term care.

When Do Long Term Care Insurance Benefits Kick In?

The most common benefit triggers for long term care insurance are the Activities of Daily Living (ADL): bathing, continence, dressing, eating, toileting and transferring. Policies usually require a person to need assistance with at least two ADLs, sometimes three, for 90 days or more, or have a cognitive impairment. Policies may have an elimination period and won’t pay for the first few days of long term care.

How do I buy long term care insurance?

When you are looking to buy long term care insurance, there are several factors to consider. Insurance that pays only for in-home care is lower in premium. However, it does not cover care in a nursing home if you should need to move into one later. Make sure that the insurance company is charging not more than 5 percent in compound inflation protection. Check the history of the insurance company. Some companies have raised premiums every year, while others have been hesitant, so far, to do so. Check what rating the company received in reviews. An "A" rating means the company is top-notch. Lastly, read through all contract details to ensure that all services you require are included in the premium and do not require an additional fee later on.

Is nursing home insurance the same as long-term care insurance?

Long-term care insurance may include nursing home insurance along with other benefits it provides. Most consumers who are thinking about all possibilities tend to look into an overall package, such as what is offered in a long-term care insurance policy. Nursing home insurance would provide only for coverage while residing in a nursing home, but long-term care insurance comes with many options such as in-home care, assisted living care, benefit payments and discounts for spouses. Nursing homes are for elderly and other individuals who have become dependent on others to care for their needs. Healthy elderly persons who are only semi-dependent and wish to live at home can look into other options available through long-term care insurance policies.