LTC Insurance Defined

Long-Term Care (LTC) is when you need, according to a health care professional, substantial supervision due to cognitive impairment (dementias, for example) or need help for 90+ days with Activities of Daily Living (ADL).

In other words, you need help, but don’t need to be in a hospital. Long-term care insurance may include arranging and paying for costs of care in one’s own home, Assisted Living Facilities, adult foster/family homes, adult day health care or a skilled nursing home. Long-Term Care Insurance is not just for Nursing Homes in other words. Long-Term Care Insurance can and does include all levels of care including skilled, intermediate and custodial care. Most people receiving care today are NOT in skilled nursing facilities – but at home or other settings.

The regular health insurance you may carry will pay for “skilled care” — which is acute in nature, and covers surgery, hospitalization, rehab and therapy, for example. But once you have stabilized and are deemed to need only custodial care/personal care – your health insurance does not cover that.

One’s health must still be insurable in order to be accepted for private Long-Term Care Insurance. Even though LTC itself usually occurs at older ages, it is prudent to consider the insurance while you’re younger and presumably healthy enough to get coverage. Most purchasers of Long-Term Care Insurance today are between 55-70. What is your plan for when your health changes for the long term and when you can’t take care of yourself? How could a Long-Term Care situation in your life impact your loved ones? You need to have the insurance in place before your health record changes.

Long-Term Care Insurance is intended mostly to provide the funds, the program and trained personnel to help supervise someone with dementia or to assist someone with his/her ADL’s – or Activities of Daily Living because they no longer can do it by themselves. For example, this could be as a result of an illness, a stroke, an accident, or due to severe pain, or frailty from aging or complications from many diseases. Caregivers help with ADL’s (Activities of Daily Living) such as transferring out of a bed or chair, continence, toileting, bathing, dressing and eating.

Supervision may also be necessary if there is Cognitive Impairment because of dangerous inattention, or acts demonstrating confusion by the impaired individual. Without supervision, a cognitively impaired person could wander off and get lost, could wander outside without any clothes on, or leave things on stoves and present a fire risk – or a host of other dangers. Long-term care usually becomes a family issue as supervision can become a full-time requirement.

Long-Term Care can come on suddenly as in strokes and accidents, or gradually as in dozens of health situations. The health insurance or Medicare you may already have will pay for “skilled” care but not for custodial care, which comprises the major part of Long-Term Care costs.


Long-Term Care Insurance is NOT for everyone. The premiums should not pose a financial hardship. Neither is it appropriate for the poor or anyone on Medicaid. Most people purchasing long term care insurance are either buying or already own their own home and have liquid assets in excess of $70,000. If your liquid assets are significantly below that, perhaps LTC insurance is not appropriate for you and your budget.

The main reason people buy LTC insurance is to protect their investments and liquid assets from being wiped out by a long-term care stay. If married, the cost of care for one spouse could impoverish the “well” spouse. The cost of care itself, without insurance, can run as low as $35,000 a year, all the way to $85,000 per year or more for a skilled nursing facility. In some states, annual costs for a Skilled Nursing Facility stay can run $130,000 a year and more, especially in Hawaii, Alaska as well as in the Northeastern states.

My clients also buy Long-Term Care Insurance in many cases to keep from burdening loved ones. It’s a great “love gift” to one’s spouse/partner or children. Caregiving – even for a loved one — can be very stressful and taxing on one’s health. The Long-Term Care Insurance may help relieve a lot of that stress on loved ones. With insurance, persons in care not only receive supervision and help with their daily activities (toileting, bathing, dressing, etc.), but care can be provided in one’s home. Most insurance companies will also cover, once a person has been approved for a claim, basic housekeeping, shopping for food, cooking and preparing meals, doing laundry, changing linens, cleaning bathrooms – all of which really can help the loved ones (spouse and adult children).

LTC insurance arranges and pays for care when one needs substantial help or supervision or can no longer take care of himself/herself for 90 days or more. Since most Long-Term Care costs are not covered by regular health insurance or Medicare, it is wise to at least learn about Long-Term Care insurance while you’re healthy and probably more insurable. Most of my clients are in their early to mid-50’s and up through 70’s, when they buy the coverage, though I also have clients who purchased coverage while in their 40’s. My average-aged client is probably around 55 years old.

The biggest mistake people make is to wait too long to get the coverage. The older one is when they apply, the higher the risk of there being serious health issues on their health record, precluding coverage or making it more expensive than it would have been had they applied while their health was stronger. If you’re over 50, it’s time to learn about it and decide if it’s for you. Many companies have 3-4 or more health ratings. The worst health rating is up to twice the cost of the best health rating.

Other Reasons people purchase Long-Term Care Insurance, besides to protect ones assets and keep from burdening loved ones, include:

  • Long-Term Care Insurance may help you stay out of a nursing home longer, or even altogether.
  • It may help preserve more of your dignity and offer you more options when you need care.
  • Maximize your CHOICES once you’re receiving care. Most Long-Term Care Insurance covers care in a variety of places such as care in your own home, Assisted Living Facilities, Adult Family homes or “foster homes”, Alzheimer’s centers, adult day care, and others. You may also use the care in any of the 50 states. Many companies also include international coverage. The policies are totally portable to any of the 50 states.
  • Help you — or your surviving spouse/partner – – not have to face Long-Term Care issues ALONE. Your family will have a whole network of people and systems supporting them in a very difficult time. What a nice gift to give your spouse/partner or other loved ones!
  • Help you get BETTER, PROFESSIONAL care. Since you’re entitled to the care, and since insurance pays for it, you’re more likely to have trained care when you need it, than you would if you were using untrained loved ones.
  • Help give you PEACE OF MIND. This is one of the main benefits of having good insurance.
  • Long-term care can often become a serious family issue. Having good Long-Term Care Insurance in place can make a most difficult time go more smoothly and be less painful than it would otherwise.