According to the US Department of Health and Human Services, about "70% of people turning age 65 can expect some form of long term care services during their lives"1. "Because women generally outlive men by several years, they face a 50% greater likelihood than men of entering a nursing home after age 65"2.
Though older people use the most long term care services, a young or middle-aged person who has been in an accident or suffered a debilitating illness might also need it. "In fact, the US Government Accountability Office estimates that 40% of the 13 million people receiving long term care services are between the ages of 18 and 64"3.
What is Long Term Care Insurance?
Long term care insurance (LTCI) helps cover the costs of custodial care, most of which are not covered by healthcare insurance or Medicare. This insurance helps you spend less of your own money on assistance services, keep more of your assets for your, your spouse’s, or your partner's use and potentially have assets to leave to your beneficiaries. Coverage often includes:
- Daily living activities assistance
- Care at home, and
- Care in facilities and community settings
Is Long Term Care Insurance Right for You?
Long term care insurance can be a key part of a sound financial plan. It can help protect you against the high cost of long term care, such as nursing home care, while protecting your assets for use by your loved ones. However, the premiums can be a significant expense. Carefully weigh the costs and the benefits of purchasing a long term care policy.
The cost of your insurance policy is based on:
The daily benefit amount you select
How old you are when you buy the policy, and
Optional benefits you choose
You may be able to buy a life insurance policy that has a disability benefit rider or an extended care rider designed to help pay for long term care costs.
1 US Department of Health and Human Services, retrieved February 2016.
2 A Guide to Long-Term Care Insurance, America’s Health Insurance Plans (AHIP), Washington, DC 2013, page 3
3 A Guide to Long-Term Care Insurance, America’s Health Insurance Plans (AHIP), Washington, DC 2013, page 2