Long-term Care Insurance

Long-term care insurance is a type of insurance that provides services such as; nursing-home care, home-health care, personal or adult day care for people over the age of 65 or with a disability or a chronic condition that needs constant supervision. In many cities across the country, the cost for these care facilities can exceed well over $100,000 per year. In the event that you or your spouse needs nursing care, at 6 figure costs, your hard earned assets will be depleted quickly.  Given that at some point in our lives we will need nursing or assisted living care, it is important to include long term care insurance into your financial plan, as you begin to approach retirement age, to offset these cost and preserve your assets for your family.


Long-term care insurance provides more flexibility and options than many public assistance programs. As wasjust mentioned, long-term care is generally very expensive; therefore it is important to include long-term care insurance in a financial plan. Long-term care insurance reimburses policyholders a daily amount (usually limited to a pre-determined amount at the time of purchase) for services to assist them with activities of daily living such as bathing, dressing, or eating. One of our local financial advisors, who specializes in long term care insurance, can assist with finding the perfect coverage for you.


The cost of long-term care is based on several factors such as, a person’s age when they buy a long-term care policy, the maximum amount the policy will pay per day, the maximum number of day or years that the policy will pay, the maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay, and if any optional benefits are included. If a person is in deteriorating health or already receiving long-term care services, they may not be qualified for long-term care insurance as many individual long-term care policies require medical underwriting. If this applies to your situation then you might be able to buy a limited amount of coverage, or coverage at a higher rate. Most long-term care policies have limits on how long or how much coverage will be paid. Some policies will pay the costs of long-term care for two to five years, while other insurance companies provide policies that will pay long-term care costs for as long as the policyholder lives, no matter how much it costs.


Buying long-term care insurance should not be done when a person is already in poor health because they most likely will get denied. A person might be denied for these following reasons; you currently use long-term care services already need help with activities of daily living, have AIDS, have Alzheimer’s disease or any form of dementia or cognitive dysfunction, have a progressive neurological condition such as multiple sclerosis or Parkinson’s Disease, had a stroke within the past year to two years or a history of strokes, and/or have metastatic cancer which is cancer that has spread beyond its original site. There are several factors to consider before buying long-term care insurance. First, do not buy more coverage than you think you might need. You possibly have enough income to pay a portion of the care costs, and therefore, might only need a small policy for the rest of the cost. Next, do not buy too little amount of coverage. By not buying enough coverage will only harm you because you will be required to use your income and assets, instead of delaying that option with the appropriate amount of long-term coverage for your situation.Remember, you can generally decrease your coverage; however, it is more difficult to increase coverage, especially if your health has deteriorated. Also, look carefully at each policy because each policy can be customized to fit different needs. It costs less to buy coverage when at a younger age. The average age of a person buying long-term care insurance is around 60. The average age of those purchasing insurance offered through a benefits package at work is around 50. Also, make sure that you can afford the long-term care insurance policy over time, because when you retire you will be on a fixed income. Finally, research different options and consult a financial advisor before finalizing a long-term care policy.