Long Term Care Insurance (LTCI) – A Primer

Private insurance companies sell LTCI policies to offset the costs of long-term care. LTCI, like all insurance policies, requires premiums to help recipients avoid paying large sums later on in the event of an illness or a catastrophic event. Premiums are based on the individual’s age at the time of purchase and are usually locked in for the life of the policy.
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LTCI covers the following, depending on the policy you choose:
  • Care in a skilled nursing facility
  • Care in an assisted living facility
  • Home health care
  • Adult day health care
Buying a LTCI policy allows the policyholder to choose from many options, such as the amount of the daily benefit, the number of years the policy will pay benefits, and, after the applicant qualifies for a policy, the number of days or months before the policy will begin paying benefits.
It’s very important to evaluate policies carefully to see which one offers the benefits you require with a premium that fits your budget. Policies differ in their benefits, contract conditions, deductibles and premiums. It is also important to take into account the rising cost of health care. Be sure the LTCI policy provides inflation protection for benefits to increase as health care costs continue to rise.
Policies are generally labeled according to the place in which benefits are paid.
  • Homecare-only policies pay for care at home and in an adult day care or adult day health care facilities. Make sure the policy includes both types of day care.
  • Facility-only policies pay for care in a skilled nursing facility and in an assisted living facility.
  • Comprehensive policies pay for care in a skilled nursing facility, assisted living facility, adult day care or adult day health care facility, and at home.
Since LTCI claims are often paid many years after the purchase of the policy, it is imperative to check the following:
  • Reputation and claims-paying history of the company.
Contact your State Insurance Department for information on specific private insurance companies. Click here for listings information for each state’s insurance information.

Who is Eligibile?

  • Applicant must be healthy at the time of application
  • Each insurance company has individual requirements and/or limitations

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