Long-Term Care Insurance is a type of insurance coverage that is available for those who may potentially need long term care. There are different types of long-term care insurance available but as a standard it covers things that health insurance does not, and it can also protect your assets.
A long-term care insurance policy provides financial assistance specifically for long term care for persons who have persistent, ongoing health conditions, a disability, or an illness that worsens over time, like Parkinson’s disease, Lewy Body dementia, and Alzheimer’s. Long-term care insurance may cover personal care assistance, hospice care, durable medical equipment, and home modifications.
Before you make a choice–including whether to buy a policy at all–you may want to consider the following:
- Your overall financial condition
Some people will look at their assets and spending and decide that they could likely cover long-term care without insurance. Some may plan to sell a second home, downsize from a family residence, or get a reverse mortgage to cover such expenses, according to advisers.
- Your ultimate financial goals
How important is to you to leave money behind? Some people feel very strongly about leaving something for their families and are highly motivated to buy insurance to protect their assets from a catastrophic years-long need for care.
- The full range of insurance options
Have a discussion with agents who are authorized to sell policies from multiple companies and with financial advisers who can put your options into context of your overall financial plan.
- Your age and health
The older you are when you buy long-term care insurance, the more it will cost. Health problems also will make it more costly or, in some cases, impossible to get coverage. If you already have memory loss or trouble with daily self-care, you are unlikely to qualify. Some insurers require a physical exam or medical-record review; others only conduct telephone health interviews. While it is recommended to start shopping for long-term care insurance by your early 60’s, many now suggest sooner, in your 50s or even your late 40s.
- Ways to pay for your policy
You may be able to cover premiums, tax-free, with money from a health care savings account.
- Additional options
Group policies offered through employers may be more affordable than individual policies, particularly if you have health problems. Buying individual policies as a couple, rather than as a single person, often reduce premiums. Couples also may qualify for “shared care.”