Long Term Care Insurance

Why Purchase Long Term Care Insurance?

Long term care insurance is a policy designed to assist an individual with the cost of care associated with a chronic illness or disability. Services typically covered under this type of policy include nursing home care, home health care, and assisted living or adult day care.

Employer-sponsored health insurance plans typically do not cover these types of extended services, although some employers may offer employees the option to purchase insurance for themselves or family members at a discounted rate. Because some of these employer group insurance plans don’t have underwriting requirements, a physical exam may not be necessary to purchase a policy. Oftentimes, an employee is able to take the policy with them after terminating employment with the company as long as the premiums continue to be paid. Long term insurance plans can also be purchased individually as well as through some service organizations.

Exclusions from coverage can include care for mental disorders or drug or alcohol abuse, and insurance companies will generally not issue policies at all to individuals with pre-existing conditions. Insurance companies will begin paying benefits after a policyholder has demonstrated need with at least two assisted daily living functions, or ADLs, such as dressing, preparing meals, or going to the bathroom. Long term care has policy limitations that restrict the dollar amount paid or number of years covered for certain types of benefits, such as $50 per day maximum for home health care service.

The cost of a care insurance policy is determined by factors such as the policyholder’s age, the maximum amount of services the policy will pay per day or over a set period of years, as well as any additional benefits that may be purchased by the policyholder. Because this type of insurance tends to be expensive, it’s important for an individual to consider many factors, including their personal needs as well as its affordability, before purchasing a policy. Although it may not be a suitable option for everyone, many people that have made the investment in care insurance have greatly benefited from the long-term care its coverage provides.