Long Term Care
(LTC) Insurance








    What is long-term care?

    Long-term care includes the care you need when you can no longer perform the day-to-day activities normally
    associated with independent living due to chronic illness, disability, disease or merely as a result of the
    frailties of aging. This includes performing everyday activities like bathing, dressing or eating. This
    assistance can be provided in your home, community, or at an assisted living facility or nursing home.


    What is the likelihood that I will need long-term care?

    It’s likely that you or a family member will need long-term care at some point in your lifetime. Currently, it is
    estimated that, on average, a 65-year-old today has a 70 percent chance of needing some type of long-term
    care. [1] This could include both care from a paid provider or care from family or friends. Your chance of
    needing long-term care services are greater if you are older, are female, or possibly due to a family history of
    longevity or debilitating disorders. And, long-term care can be expensive. If you need care, the average
    lifetime expenditure of someone age 65 or older who needs long-term care is about $150,000. [2] In addition
    to this very real cost, families are also supplementing the care needs of their loved ones with everyday
    assistance. The need for long term care is not only limited to the elderly; it may be necessary for younger
    individuals who are debilitated by accidents, strokes or by degenerative diseases like Parkinson’s Disease,
    Multiple Sclerosis or others.


    What is long-term care insurance?

    Long-term care insurance provides benefits to help you and your family manage the potentially significant
    costs of long-term care. It helps you to protect your financial assets so that you and your family will have the
    financial resources to pay for the care you may need and can focus on your life together instead of worrying
    about your finances. This takes the potential burden of care off of your family and gives you the peace of mind
    that you will be able to afford the type of care you need and choose. Long-term care insurance costs only a
    fraction of what it would cost you if you had to pay for your care needs completely on your own.

    What kinds of illnesses does long-term care insurance cover?
    Long-term care insurance covers assistance that may be necessary due to aging, an accident or lengthy
    illness, chronic health conditions and/or physical disabilities, such as a stroke, Alzheimer’s disease, Multiple
    Sclerosis, or Parkinson’s.


    What types of care can I receive with long-term care insurance?

    Long-term care insurance gives you the ability to choose the type of care you prefer. Plans can include
    coverage of home care, hospice care, respite care, adult day care, care in assisted living facilities and
    nursing homes and some plans may include coverage for some types of informal (family or non-
    professional) care. Some plans simply pay you a cash benefit for each day you are disabled so that you have
    total freedom to decide which services and providers you will use.


    Am I covered for long-term care?

    Most long-term care services are NOT covered by any other kind of insurance, including health insurance,
    long-term disability insurance, Medicare, or Medicare supplemental coverage. Only long-term care insurance
    covers the type of day-to-day personal care assistance you might need if you were unable to care for yourself
    as a result of chronic illness, disability or disease. This type of care is known as personal or custodial care.


    Most people incorrectly think Medicare will pay for long-term care services. In reality, Medicare does not
    generally cover long-term care. Medicare pays for skilled care in a nursing home only for the short period
    during which you are recuperating following a hospital stay (only up to 100 days). Once your care needs
    stabilize, and you need personal or custodial care, Medicare will not pay these costs. Medicare will only pay
    for care at home under very limited circumstances. Medicaid pays for long-term care only for seniors with very
    low incomes. Please visit the Medicare and Medicaid Long-term Care Web site for more detailed information
    on what Medicare covers.


    What does long-term care cost?

    Long-term care can be expensive. The national average cost of one year in a nursing home is over $75,000.
    [3] A year of care at home, on average nationally, can cost $40,000.[4] The total cost of care can be even
    higher depending on the area of the country where care is received, the length of stay or hours of care for
    home care, and the type of care needed. These costs can be a financial hardship without the benefit of long-
    term care insurance.


    In addition to financial costs of care, there is also an emotional cost on family and friends as they struggle to
    support and assist a loved one who needs care. The enormous emotional stress that you and your family
    may experience caring for a loved one can be significant. While family may be willing to provide the care that
    is needed, it is important to consider the toll it takes on them. Ensuring that all of the costs of your care –
    emotional and financial – are not an additional burden, will provide you with peace of mind and let you focus
    on living your life as independently as possible.

    Is long-term care insurance affordable?

    Long-term care insurance is more affordable than you might think, with a variety of plans, benefits levels and
    features available to suit your needs and budget. You’ve worked hard to build your savings and long-term
    care insurance is a way to help protect those savings. You can manage the costs of long-term care insurance
    by choosing a plan that matches the financial and retirement goals that are right for you and your family. Since
    the cost of long-term care insurance coverage is based on the age when you apply, in general, the younger
    you are, the lower your premiums. Visit our Financial Planning page to learn more about how you can plan
    your future.


    What is the cost of waiting to buy long-term care insurance?

    The cost of waiting to buy may be significant – both in terms of how much you will pay as a result of buying it
    at an older age, and in terms of whether you might not qualify if you develop a health condition that makes you
    ineligible to obtain insurance. For your peace of mind, you should consider buying long-term care insurance
    for you and your family between the ages of 40-50. Generally, the younger and healthier you are when you buy
    long-term care insurance, the lower your premiums will be. Waiting too long could decrease your likelihood of
    being accepted and will increase the cost of your insurance.


    What protections are in place for consumers?

    The National Association of Insurance Commissioners has established detailed industry-wide standards to
    protect consumers. Most states have adopted these standards and require insurance companies selling in
    those states to adhere to them. These include protections against arbitrary rate increases, disclosure
    requirements for all privacy provisions and flexibility for consumers to adjust their policy benefits to meet
    future needs and reduce costs should they choose to do so. Another important consumer safeguard – buy
    insurance from a company you can trust to be around in 20-30 years and check the financial rating and
    claims paying abilities of the companies you are considering.




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    [1]Kemper, P, Komisar, H and Alecxih, L. “Long-Term Care Over an Uncertain Future: What Can Current
    Retirees Expect?” Inquiry. 42: 335-350, Winter 2005/2006

    [2] Kemper, P, Komisar, H and Alecxih, L. “Long-Term Care Over an Uncertain Future: What Can Current
    Retirees Expect?” Inquiry. 42: 335-350, Winter 2005/2006

    [3] “Caregiving Across the States,” Family Caregiver Alliance, November 2007.

    http://caregiver.org/caregiver/jsp/content_node.jsp?nodeid=1274

    [4] LifePlans, Inc., “Descriptive Analysis of Patterns of Informal and Formal Caregiving among Privately
    Insured and Non-Privately Insured Disabled Elders Living in the Community,” April 1999.
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