What Is Long-Term Care Insurance And Who Needs It?

Updated: Jul 18, 2022

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According to a survey carried out by the U.S. Department of Health and Human Services, there’s a 70% likelihood that the average 65-year-old will require some form of lifelong care as they advance in age. This study also discovered that although one-third of 65-year-olds may never require such help, one in every five people in this age-group will require long-term care for over five years. Based on this data, imagine having to pay for long-term care services at an assisted-living facility for more than five years! This is where long-term care insurance comes into play.

Long-term Care Insurance
Long-term care insurance information, form, Folders and stethoscope.

There is a 70% chance the average 65-year-old will require some form of lifelong care.

You can avoid such high expenses by researching cost-effective options such as acquiring the long-term care insurance as early as now. Having the right facts at your disposal makes you better prepared in case a tragedy strikes. In this article, we will explain what long-term care insurance is, make recommendations for the groups of people that need it most, and provide a few tips on how to buy this policy.

What Is Long-Term Care Insurance?

Put simply, the term “long-term care” refers to the assistance offered to an individual with a chronic illness or disability over an extensive period. If you end up being diagnosed with a chronic disease, don’t expect your Medicare or Medigap Insurance policy to pick up the bill. Other programs such as Medicaid have stringent financial requirements, which you’re likely not to qualify for.

But, with long-term care insurance, you can receive all the aid you need from a nursing facility without depleting all your retirement savings. So, just who needs a long-term care insurance policy?

Who Buys It?

We now have people in the age bracket of between 50 and 60 years purchasing this cover.

home remodeling

With each passing day, more people are beginning to embrace the benefits that come with acquiring a long-term care insurance policy. We now have people in the age bracket of between 50 and 60 years purchasing this cover. These individuals do not want to become a burden to their friends or families should anything go wrong once they age. Ideally, if you feel that you fall into any of the following categories, you should consider getting a long-term insurance policy:

  • You own a large number of assets or receive significant amounts of income and feel that you wouldn’t qualify for Medicaid.
  • You want to lead an independent life even when you get old.
  • You are in a position to pay the premiums (based on your tax status, you may be legible for some tax benefits).
  • You currently have a medical condition or your family has a history of chronic illnesses or disabilities. Keep in mind that, once you’re diagnosed with either one of these health problems, no company will want to insure you.

How Much Does Long-Term Care Insurance Premium Cost?

Your Age And Health Status

The majority of insurers offer this policy to anyone aged between 18 and 85 years. The only exception is Genworth Financial, which insures persons up to age 79. Many have the false notion that waiting until they retire to start paying premiums is better. This is a very bad idea. The truth is that the older you are, the higher your monthly premium will be. A 60-year-old individual can end up paying up to three times the premium being paid by a 50-year-old. You should purchase this policy as soon as possible because, once you grow old, health problems are likely to set in.

Benefit Period

It’s the period during which the insurance policy will cover your benefits. It’s usually described in terms of the number of years.

Elimination Period

Unlike the benefit period, this one is stated as the number of days, and it ranges between 30 and 180 days. If you’re insured, then you have to pay for your care before you start receiving benefits.

Inflation Protection Option

One-third of 65-year-olds may never require such help, one in every five people in this age-group will require long-term care for over five years.

The purpose of this is to protect your benefits from inflation. The idea here is to increase the benefit amount every year so that it’s not affected by any changes in the economy. Experts recommend choosing an inflation guard that raises your benefits by 5% using the annual compounding method.

piggy bank affordable insurance

Services Covered By Long-Term Care Insurance

Most insurance companies offer these services under the long-term insurance policy:

Nursing Home

It’s an institution, which is designed to provide round-the-clock services including rehabilitation, medical services, personal care, and assistance with routine activities. Before purchasing the policy, inquire whether it covers only the room-and-board type of service or a full range of them.

Assisted Living

Although most people use the terms “assisted living” and “nursing home” interchangeably, the two are not the same. As previously stated, a nursing home offers supervised care to individuals. In contrast, an assisted living facility is designed to offer support and companionship. The latter constitutes of an array of separate apartments or condos, where seniors or other special groups of people live communally. The services you’re likely to find at an assisted living institution include personal hygiene tasks, cooking, medication management, and housekeeping. Most companies provide assisted living coverage under the long-term care insurance.

Home Care

Young nurse and female senior in nursing home
Young nurse and female senior in nursing home, the towels going to be changed

Home Care is entirely different from the two services highlighted above. It differs in that an individual is not required to leave their apartment. Instead, the assistance he requires is provided from the comfort of their home. Often, it means hiring a professional caregiver or agency to help with routine chores including grooming, bathing, and housework.

Home Modifications

Some insurance policies will also cover the additional costs incurred in making home improvements. This includes installing grab bars, toilet safety rails, ramps, stair lifts just to mention a few.

Future Service Options

At times, a new long-term care service may become available after you’ve already purchased the policy. You should check to see if the long-term care insurance being offered is flexible enough to allow for such adjustments.

Does the Government Not Pay for Long-Term Care?

There are special public programs such as Medicare and Medicaid, which can help but even then, you’re required to meet certain qualifications before being eligible.

Many turn a blind eye to long-term care insurance because they assume that the government will come to their rescue when the time comes. The truth is that the government is not responsible for your long-term care, neither are your children and colleagues.

Yes, there are special public programs such as Medicare and Medicaid, which can help but even then, you’re required to meet certain qualifications before being eligible.

The Only Time Medicare Can Pay For Your Lifelong Care Is If:

  1. You need professional services or rehabilitative care in a nursing home for a maximum duration of 100 days.
  2. You require rehabilitative care at your residence for a brief period.

On the other hand, Medicaid pays for this care only if you’re receiving an income below a specific level and you still have to meet other qualifications.

Choosing a Long-Term Care Insurance Policy

Life Insurance Choices

If you have already decided to get long-term care coverage, then you’re just a few steps from achieving this goal. To ensure you get the best coverage, you will need to research thoroughly. First, ask your local state insurance department for a list of all insurance firms that sell this policy. Narrow down your choices by eliminating companies which have received complaints, negative remarks, and poor ratings.

Second, assess the stability of the insurance firm by checking its history with this particular policy. There are numerous sites that provide records of companies’ histories. List the firms that seem to maintain good records.

The next step entails comparing the data and costs from the companies you have narrowed down. At this point, you should have three to four choices to choose from. Checking how often and by how much these companies raise their premiums can go a long way in choosing a great long-term care insurance cover.

After comparing the different firms, print the final policy that you find fit. Review this fine print wisely. You can even consult your financial advisor or attorney to help you understand all the details outlined in the policy. If you have any questions, call the insurer and have a representative answer them to your satisfaction. Do not be in a rush to make a decision.

When it comes to making premiums, you should avoid paying in cash. Also, always ensure that you’re paying to the company’s account and not an individual. The good thing is that most states are mandated by law to give you a 30-day period to assess the insurance policy. If you have any doubts before this time elapses, you can always return the policy and receive a full reimbursement.


With the increasing life expectancy rate, more seniors are finding themselves in situations where they require long-term care. Unfortunately, this service is not covered by most health insurance policies. For this reason, you should enroll for a long-term care insurance policy to cater for such expenses when you retire. Long-term care coverage is essential as it helps to preserve your savings and assets. It also enables you to maintain financial independence while relieving your family from a full-time caregiving job.

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