Long term care insurance, also referred to as LTC insurance, helps seniors pay for long-term retirement living options and also medical expenses. It usually covers care that is not paid for by health insurance, Medicare, or Medicaid. Since most assisted living and other long term care is not covered by Medicare, many elders privately pay. Thus many elders opt for purchasing LTC insurance because it may supplement private payment.
LTC insurance policies can pay for assistance with the basic activities of daily living (ADLs) like bathing, toileting, dressing, eating, walking, etc. or for skilled medical care from therapists and nurses. The policies can pay for months to years depending on the needs of the insured person. Though health care insurance or Medicare typically pay for more immediate medical expenses, like a surgical procedure, LTC insurance can cover care for more chronic conditions like diabetes, Alzheimer’s, or other disabilities.
LTC insurance typically can cover expenses for home-care, independent living, assisted living, adult day care, respite care, nursing home care, hospice, or for living in a CCRC or residential care home. Most policies have a waiting period that works like a deductible so if a senior needs home health assistance, for example, he/she might have to wait 90-120 days for their insurance to start coverage. LTC insurance may pay for caregiver assistance for basic daily needs (ADLs) or skilled nursing or therapy services for seven days a week, 24 hours per day, until either the daily or policy maximum is reached.
LTC insurance premiums are expensive and becoming more costly because the insurance is risky for the insurer. The premiums are cheaper if buying a policy at an earlier age. Rates may likely increase though during the duration of time that people have policies, making it more difficult for them to keep their policies, though they risk losing all the benefits for the premiums that they have already paid if they stop coverage. The insurer will also only issue a policy to someone in reasonably good health so potential buyers need to decide whether they want coverage well before the need rises.