Long-Term Care Insurance

Because of old age, mental or physical illness, or injury, some people find themselves in need of help with eating, bathing, dressing, toileting or continence, and/or transferring (e.g., getting out of a chair or out of bed).

These six actions are called Activities of Daily Living – sometimes referred to as ADLs. In general, if you can’t do two or more of these activities, or if you have a cognitive impairment, you are said to need “long-term care.”

 

Long-term care isn’t a very helpful name for this type of situation because, for one thing, it might not last for a long time. Some people who need ADL services might need them only for a few months or less.

Many people think that long-term care is provided exclusively in a nursing home. It can be, but it can also be provided in an adult day care center, an assisted living facility, or at home.

Assistance with ADLs, called “custodial care,” may be provided in the same place as (and therefore is sometimes confused with) “skilled care.” Skilled care means medical, nursing, or rehabilitative services, including help taking medicine, undergoing testing (e.g. blood pressure), or other similar services. This distinction is important because generally Medicare and most private health insurance pays only for skilled care–not custodial care.

Costs and Eligibility May Vary

The cost of your long-term care policy is based on:

• How old you are when you buy the policy
• The maximum amount that a policy will pay per day
• The maximum number of days (years) that a policy will pay
• The maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay.
• Any optional benefits you choose, such as benefits that increase with inflation

If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance as most individual policies require medical underwriting. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate.  Some group policies do not require underwriting.

Cost Examples: 

Long-Term Care Insurance Rates for Single Age 55

Average Cost: $2,007-per-year *
Low Cost: $1,764
High Cost: $3,446
* Average Cost (with preferred health discount): $1,720-per-year
Age 55, standard health rate. Initial policy benefit for EACH is $164,000 based on a Daily benefit of $150 and 3 year benefit period. Coverage value will increase annually because a 3 percent compound inflation growth option was included.

Long-Term Care Insurance Rates for Couple Both Age 55

Average Cost: $2,466-per-year (combined)
Low Cost: $2,080
High Cost: $4,824
Both individuals are age 55, standard health rate. Initial policy benefit for EACH is $164,000 based on a Daily benefit of $150 and 3 year benefit period. Coverage value will increase annually because a 3 percent compound inflation growth option was included.

Long-Term Care Insurance Rates for Couple Both Age 60

Average Cost: $3,381-per-year (combined)
Low Cost: $2,794
High Cost: $5,637
Both individuals are age 55, standard health rate. Initial policy benefit for EACH is $164,000 based on a Daily benefit of $150 and 3 year benefit period. Coverage value will increase annually because a 3 percent compound inflation growth option was included.

 

Check out this article on tech to support long-term care elders: Using Tech to Support Seniors: Long-Distance Caregiving Made Easier

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