What every Adult Needs to Know About
Long Term Care Insurance

(Receive a free copy of the ebook, "Insider's Guide to LTC"
when you request a quote)

What is Long Term Care Insurance?
Long-term care insurance, abbreviated LTCi is a type of insurance that will pay the bill if you should need extended care beyond what your regular insurance or Medicare will provide. Commonly thought of as "nursing home care," a LTCi policy is actually much more. It will pay the nursing home bill, but can also pay a care-giver who comes directly to your home. Assisted living facilities and adult day care centers are usually covered as well.
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Do I Still Need my Health Insurance if I have LTCi?
Yes. LTCi will not pay a hospital for care you receive during an illness, nor will it make payments to a doctor. Furthermore, doctor bills accrued even in the nursing home are paid by your Medicare or Major Medical Health Insurance. LTCi pays for any type of ongoing care—custodial, Intermediate, or skilled care—that you require when you are no longer able to perform the Activities of Daily Living without assistance.

What are the Activities of Daily Living?
The government defines six activities of daily living. They are bathing, eating, dressing, transferring, toileting, and continence. "Transferring" means getting out of your bed and into a wheelchair or visa versa. It does not refer simply to an inability to walk without a walker, or cane. In addition, a LTCi policy can be used if the impairment is cognitive—such as dementia or Alzheimer's Disease.

What are the risks of not having this insurance?
Six in every 10 adults age 65 or over will need extended care at some point before they die. The national average for nursing home care as of 2004 was $72,000 per year. Furthermore, Medicaid—the primary payer of nursing home bills—requires a total spend-down of your assets before you can receive pay via the government. Worse yet, if you have a good life insurance policy you hope to leave to your children, your hopes will be dashed as Medicaid will get the bulk of your insurance upon your death.

Should I consider buying an affordable long-term health care insurance policy?
If your assets are over $100,000, you need to protect them with LTCi insurance. Some people whose assets are less but who have sufficient retiree income also opt for the insurance because it gives them freedom of choice and provides protection for a spouse who may still be living in the home.

If your assets are over 1 million, you may not need to purchase LTCi as you have enough money to pay for several years of care while allowing those at home to continue to live comfortably. However, many people who have worked all their lives to build up such a legacy have no desire to spend it on health care. Since you have to take money out of retirement instruments at age 70 1/2 anyway, why not plan to let the interest from your assets pay your LTCi premium. That way, you have more of your Social Security for yourself, satisfy the required minimum distribution, and still have protection for a fraction of the cost of paying for it yourself.

What should I look for in a policy?
The surest way to know you have a policy that is right for you is to contact a qualified, reputable agent and allow him/her to discuss the details of a good policy. In spite of our American independent spirit and our desire to "grab and go," LTCi is not a "do it yourself" venture. Companies vary, language is not standardized, and that which appears "cheap" may be missing important features that you will wish you had. Talk to someone who is willing to meet with you a couple of times to explain the detail, and then apply for the coverage.