Long-Term Care Insurance Policies

Long-term care is day-to-day care that a patient (usually over age 65) receives in a nursing facility or in his or her residence following an illness or injury, or in old age.

The need for long-term care goes up gradually as a person ages and needs more assistance with daily living. For a portion of the population, long-term care insurance is a good idea. However, it should not cause financial hardship and force you to forego other financial needs. A long-term care insurance policy is only for people with significant assets that they want to preserve for family members or for those who want to assure independence and not burden family members with nursing home bills. One should not buy long-term care insurance if the only source of income is social security, or if paying utilities, food, or Medicare already stretches a budget.

Benefits
Comparing long-term care policies is difficult because many policies provide different combinations of benefits and coverage. Most companies offer to pay a fixed price every day you receive care. Others offer to pay a percentage of the cost of services or a specific amount of money to cover the actual charges for care. These policies are only good if they provide for benefits to increase as nursing home costs rise.

There are no standard benefits when it comes to long-term care insurance. So, be sure to always read the fine print on any policy. Generally, nursing home coverage pays for skilled custodial care. Some policies offer to pay for any care required, provided all eligible requirements are met. Some companies pay for care in your home but only if care is provided by RNs, licensed practical nurses, or licensed rehabilitation therapists. However, most will not pay for home health aides.

Only an exceptional policy will cover homemaking services to cook, run errands, and perform other household chores. A company will rarely pay for family members who perform home care services because it is too difficult to monitor. Your best bet is to look for a policy that provides a range of services and independent home care services.

Benefits are usually described in terms of the amount the carrier will pay per day for care in a nursing home and varies from $75 - $250. Check around for what homes in your area are charging. Keep in mind, prices will increase by the time you need care.

Long-term care insurance allows you to choose the length of time you want to be covered. It ranges from one year to life. Obviously, the longer your coverage is for, the higher your premium will be.

Sources
Many different sources offer long-term care insurance policies, including some independent life insurance policies -- both stock and mutual. A percentage of the policy's death benefit is paid when long-term care is needed; death benefits and cash values are reduced accordingly. This type of insurance can also be bought through senior citizen organizations, fraternal societies, and retirement communities. Some employers are beginning to offer long-term care policies to their employees, employees' parents, and their retirees.

Exclusions
Long-term care insurance does have a few common exclusions of which you need to be aware. Most exclude:

• Mental and nervous disorders, other than Alzheimers*
• Addiction to drugs and alcohol
• Injuries or illnesses caused by war
• Treatment paid by government
• Injuries or deaths that are self-inflicted
  
  *(Some policies cover Alzheimers. Read the fine print.)

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