What does long-term care insurance cover?


It might be hard to imagine you or your loved ones needing assistance with everyday activities like eating and getting dressed, but it’s good to be prepared if and when that time comes. According to the Office of the Assistant Secretary for Planning and Evaluation, 70% of adults over the age of 65 will require some form of long-term care service. The problem is, it can be really expensive.

Even if you’re healthy, long-term care insurance can be a decision you make today to protect yourself from major expenses down the road. Need to learn more about making such a future-facing decision? We’re here to help.

Blog illustration What Does Long Term Care Cover

What is long-term care insurance coverage?

Just like the term sounds, long-term care insurance helps you climb the financial mountain that long-term health services can be when age, injury, disability, illness or cognitive impairment keeps you from being able to take care of yourself. From custodial care to daily living and personal needs, this type of insurance looks after the human services and benefits that are often not covered by government programs.

Who needs long-term care insurance?

Since 70% of people over the age of 65 need long-term care, the closer you are to that age, the more likely you are to be in need of long-term care insurance. This might seem like something you can worry about later on, but if you wait until you actually need long-term care, it might be too late.

Whether you actually require long-term care insurance can depend on many factors including age, gender, living arrangements, health status, mental health and current or potential disabilities. According to the Administration for Community Living, women outlive men by about five years on average, meaning they’re more likely to live at home alone when they are older. This means women are prone to need long-term care or at-home health care. Also, people who have diabetes and high blood pressure may need more care with age. Take a personal audit of your and your family’s health to determine if this insurance is right for you.

Alternatives to long-term care insurance

Let’s say you feel long-term care insurance isn’t something you need. There are alternatives to assure a comfortable and planned-out future.

An asset-based policy is a hybrid of long-term care insurance and life insurance that allows you to leverage your death benefit to pay for nursing care costs.

An annuity lets you set aside a certain amount of money and receive regular payments over a specified period of time.

Or, starting right now, you can put money into a retirement savings plan to pull from if or when long-term care is needed. Lastly, you can ask a family member or friend to help care for you if you become unable to do so on your own.

What is included in long-term insurance coverage?

Unlike regular health insurance, long-term care insurance includes services that take place both in the home and other care facilities like nursing homes, adult care centers and assisted living.

Medicare and Medicaid services help older adults afford medical expenses and medication, but they don’t cover the cost of long-term care. According to a 2021 Cost of Care Survey by Genworth, the average cost for a semi-private room in a nursing home is around $7,908 per month, and people generally stay in long-term medical care for about 2.9 years.

With a long-term insurance plan, you can receive care in unique and personalized ways, depending on what you need.

Home Care

This insurance covers home care which can include the cost of occupational therapy, rehabilitation or an in-home nurse that could do everyday tasks that have become difficult like bathing and cooking.

Nursing Home Care

For those not needing 24-hour care, nursing homes are a great option and are covered by this type of insurance. Nursing homes provide residents medication reminders, meals and some assistance with daily activities.

Assisted Living Care

An assisted living facility offers care to those who can no longer safely stay in a traditional nursing home facility. Regular meals, check-ins and daily assistance are all offered to seniors through a long-term care insurance plan.

Additionally, long-term care coverage in the United States can help with short-term hospice care or temporary care for those who only need a caregiver for 14 to 21 days. Both of these options can be done in any of the listed settings above.

Benefits of long-term insurance coverage

The main benefit of long-term care insurance is peace of mind. Again, it’s probably hard to imagine you, your spouse or your parents needing long-term care services. We understand. But, investing in coverage now can keep you from wondering “what if.” It’s also a great way to reduce the potential financial burden if something happens you weren’t prepared for.

Coverage premiums can be expensive, but another benefit is they are tax-deductible to you, your spouse or other dependents as long as they exceed 7.5% of your adjusted gross income, according to the Internal Revenue Service Publication 502.

Drawbacks of long-term insurance

The main negative to care coverage is the premium. The price for long-term insurance depends on your age, gender, health, marital status and location and can run anywhere from $1,000 to around $10,000 yearly. These numbers might be daunting but can save you money in the long run.

Ultimately, the decision to buy coverage is dependent on what your priorities are. If you are strapped for cash currently, maybe it’s not the right time to buy. But, if you’re nervous about future expenses or want peace of mind, it’s a great time to look into long-term insurance.

What to know about long-term insurance

While short-term benefits only cover expenses for about a year or less, long-term plans offer an option to renew coverage annually so you can keep the same plan for much longer. It also offers coverage for home care, assisted living, nursing home care and other personal care benefits that short-term care may not.

When searching for a long-term insurance provider, find an organization that is quick to answer questions, interested in giving you personalized care and offers you a price that works best for you.

Long-term benefits for employers

For businesses, purchasing long-term care insurance on a group basis can have a number of key benefits. Companies may receive larger tax benefits and savings if you qualify for a group discount rather than purchasing an individual option. Offering long-term care insurance can also enhance your employee benefit and health care package and be a tool to recruit and retain employees.

If you’re thinking about the future and ready to protect yourself and your family from potential financial burden, contact us today.

Related Posts

‹ Return to the Blog