Long-term care insurance

Do not confuse Long-term Care (LTC) Insurance with Long-term Disability Insurance. They are two entirely different types of insurance. LTC is for in-home care, assisted living facilities, and nursing homes. According to www.longtermcare.gov, in 2000, almost 10 million US people required some form of long-term care.

In fact, 3.6 million (37%) were under the age of 65. The remaining 63% (6 million) were over 65 (Roger & Komisar 2003). Once you turn 65, almost 70% will need LTC at some point. Let’s face it, as we age, we become frailer and weaker. Our bones become brittle and we are more susceptible to falling. It has been said that old age is not for the faint of heart.

Contrary to popular belief, LTC is not medical care. It is assistance with your basic personal everyday tasks of life, Activities of Daily Living (ADLs). These include bathing, dressing, the use of the toilet, getting to and from your bed or chair, incontinence care, and eating. LTC also provides Instrumental Activities of Daily Living (IADLs). These include housework, managing money, taking medication, preparing and cleaning up after meals, shopping for groceries and/or clothes, using the telephone or other communication devices, responding to emergency alerts, such as fire alarms, and even caring for pets.

When you purchase LTC insurance is entirely up to you. However, you should have it in place before you turn 60 and definitely before you turn 65. One thing to remember is that the older you are, the more it will cost. Also, as you get older you might develop some illness or illnesses that could prevent you from getting LTC insurance or more expensive.


Unfortunately, we don’t know the future, so we cannot accurately figure this out. However, as I mentioned earlier, at 65 you have almost 70% chance of needing some type of LTC. Statistically, men typically will need the care for 2.2 years, while women will need care for 3.7 years. About 1/3 of 65 year-olds may never need LTC. However, about 20% will need it for more than five years.

Let’s look at some other statistics from the Administration on Aging:

Type of care

Average years care needed

Percent of people using care (%)

Any Services

3 years


At Home:

Unpaid care only

1 year


Paid care

Less than 1 year


Any at home care

2 years


In Facilities

Nursing facilities

1 year


Assisted Living

Less than 1 year


Any care in facility

1 year


These stats should give us pause. We might think that our grown children or our spouse will be willing and able to care or pay for care for us in our old age. They might. However, is it fair to them to have to them to do this? Our spouses might be willing, but what if they too are ill or if they become ill because of the stress of caring for us? Our children will most likely have a family of their own. Do they need the added financial stress of taking care of us?

An unpaid caregiver (family member, spouse, friend, or neighbor) provides 80% of the care at home. These caregivers spend on average about 20 hours a week providing care. About 58% have intensive caregiving responsibilities, such as bathing and/or feeding.

There are some who won’t qualify for LTC insurance. Some common reasons why you won’t be able to obtain LTC insurance are:

  • You currently use long-term care services;
  • You already need help with Activities of Daily Living (ADL);
  • You have AIDS or AIDS-Related Complex (ARC);
  • You have Alzheimer’s Disease or any form of dementia or cognitive dysfunction;
  • You have a progressive neurological condition such as multiple sclerosis or Parkinson’s Disease;
  • You had a stroke within the past year to two years or a history of strokes;
  • You have metastatic cancer (cancer that has spread beyond its original site).

Before purchasing LTC insurance you need to consider the following;

  • Don’t buy more insurance than you think you may need. You may have enough income to pay a portion of your care costs and you may only need a small policy for the remainder. You also may have family members willing and able to supplement your care needs
  • Don’t buy too little that will only delay the use of your own assets or income to pay for care. Think about how you feel about having care costs that are not covered. While you can usually decrease your coverage, it is more difficult to increase coverage, especially if your health has declined
  • Look carefully at each policy. There is no “one-size-fits-all ”policy
  • If you choose a policy that only pays for room and board in a facility, plan for other expenses, such as supplies, medications, linens, and other items and services that your policy may not cover
  • It costs less to buy coverage when you are younger. The average age of people buying long-term care insurance today is about 60. The average age of those purchasing policies offered at work is about 50
  • Make sure that you can afford the long-term care insurance policy over time, as your monthly income may change
  • Research and consider different options and talk with a professional before finalizing your decision
  • Don’t feel pressured into making a decision

You can purchase LTC insurance from:

  • An insurance agent – Contact your state’s Department of Insurance for information on companies that offer LTC insurance.
  • A State Partnership Program – A State Partnership Program links special Partnership-qualified (PQ) long-term policies provided by private insurance companies with Medicaid.
  • Your employer – many employers, including the federal government, and some state governments offering LTC insurance. Typically, the employee pays the full cost of the insurance. However, the rates are more favorable than if you were to purchase it on your own. Check with your Human Resources or Benefits Department.

The cost of LTC insurance varies depending on your age, coverage your select, and the policy type. The average LTC insurance policy cost was about $2,207 per year in 2007. It covered 4.8 years of benefits, excluding the 20 percent of people who elected lifetime coverage. It had a daily benefit amount of $160. It was a comprehensive policy that covered both facility and at-home care. It included some form of automatic inflation protection.

One other thing, LTC insurance benefits are not taxable, unless your policy pays a per day fee and you go over the per day limit. The amount over the limit will is taxable. The per day fee changes each year according to federal guidelines and inflation. Currently, the per day rate that can be spent without being taxed is $270.

I hope that this information has opened your eyes to the need for LTC insurance.

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