About Long-term Care Insurance

As Medicare does not cover long-term care stays in a nursing home and does not cover home care, individuals must privately pay for their own care needs. If someone has nearly no assets (less than $2,000.00 in most states), they may qualify for Medicaid coverage which will pay for a nursing home stay, however, your choices become limited once you are a Medicaid recipient (click to read about Medicare and Medicaid coverage). Another way to pay for your long-term care is through the purchase of a long-term care insurance policy.

What is Long-term Care?

Long-term care is considered any type of support or care you may need over an extended period of time. Most insurance companies consider long-term care to be more than a one month time period and their policies will not begin until one month of care has been fulfilled (some policies will pay you back for the first month of care and some will not). Long-term care needs include personal care such as bathing and dressing, meal preparation, medication monitoring, assistance with walking and exercises, house cleaning, laundry and escorting to doctor’s appointments and running errands.

As our medical care has advanced, we are able to assist individuals to recover from conditions such as strokes, heart attacks and cancer. At the same time, recovery from these illnesses may require a time period of one to two years. In addition, some age-related diseases such as Parkinson’s Disease, Alzheimer’s Disease and other types of memory loss may progress over a time period of several years. In these circumstances, the costs for hourly or live-in care can multiply and easily reach $100,000.00 per year or more.

It is estimated that after the age of 65, most people will need at least 1 year of care and 50% of people at nursing homes stay for an average of 2.9 years.

Insurance Statistics:

  • 1 in 1,200 will use their fire insurance policy
  • 1 in 240 will use their automobile insurance policy
  • 1 in 3 will use their long-term care insurance policy

Long-term Care Insurance Policies may be purchased in a variety of forms. Typical policies will cover from $50 to $150 of care per day in either the home or in a nursing home. Benefit periods typically range from 2 years to a lifetime.

Long-term Care Insurance Policies will vary in the requirements for the home health care. Some will reimburse for anyone providing the care (family member or privately hired aide) and others will require the care in the home to be provided by a licensed Senior Home Care Agency. Read answers to popular long-term care insurance questions in our Ask the Experts section, or ask your own questions.