Long-Term Care

Long-Term Care

October 08, 2020
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Let’s be frank. Nobody enjoys talking about Long-Term Care Insurance, (LTC). However, by some estimates, 7 out of 10 people turning 65 will need LTC at some point in their lives.

You might believe that LTC only covers nursing home expenses, but in fact, half of all long-term care services are provided in-home.(1) LTC insurance may help to offset the cost of these services to you.

Essentially, there are 2 ways to pay for LTC expenses through insurance coverage. As you might imagine, there are pros and cons to each.

Hybrid Life and Long-Term Care Insurance. This combination of Life Insurance and a LTC “living” benefit provides that the death benefit becomes your initial long-term care benefit pool. Most plans will pay for expenses associated with informal care from a family member or caregiver, or professional care received in-home or at a facility. At death, if you have not used your LTC benefit, your beneficiaries will receive a guaranteed death benefit. If you have exhausted your LTC benefit, your beneficiaries will still receive a minimum death benefit. This helps to address the “use it or lose it” concern often associated with Long-Term Care Insurance policies.

Long-Term Care Insurance. This type of private insurance plan offers a pool of benefits you purchase to help pay for custodial care costs. These plans offer a fixed amount calculated daily or monthly with benefits covering a set period of years, although some companies will provide a lifetime benefit. Most often, these policies pay benefits through dollar-for-dollar reimbursement of the covered expenses. Consumer needs in LTC have changed greatly in the years since LTC Insurance came into being, and today there are many options available to help tailor plans to your individual circumstances.

1.American Association of Long Term Care Insurance-AALTCI Sourcebook 2015-16

This is meant for educational purposes only.  (10/20)