What Is Long-Term Life Insurance?
Long-term care insurance is designed to provide coverage for long-term services and support that includes personal and custodial care in various settings such as your home, a community organization, or other facility. Unlike traditional health insurance, long-term care insurance policies reimburse policyholders a daily amount for services to assist them with activities of daily living such as bathing, dressing, or eating. Care options and benefits can be selected to get the services needed, where needed.
Cost of Long-Term Care Policy
The cost of a long-term care policy is based on:
| Age at the time of application | Amount of coverage selected | Length of coverage | Deductible chosen | Health at the time of application |
|---|---|---|---|---|
| 50 | $150,000 | 5 years | $2,500 | Good |
| 60 | $200,000 | Lifetime | $5,000 | Poor |
| 70 | $100,000 | 2 years | $1,000 | Excellent |
If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance as most individual policies require medical underwriting. In some cases, you may be able to buy a limited amount of coverage, or coverage at a higher “non-standard” rate. Some group policies do not require underwriting.
Many long-term care insurance policies have limits on how long or how much they will pay. Some policies will pay the costs of your long-term care for two to five years, while other insurance companies offer policies that will pay your long-term care costs for as long as you live—no matter how much it costs. But there are very few that have no such limits.
Before purchasing a long-term care policy, it is essential to understand that insurance companies may increase the premium on your policy. Thus, requesting information on the company’s premium rate history is a good idea.
It is advisable to evaluate your needs, budget, and long-term care policy options carefully. Long-term life insurance can be an excellent option for those who want to ensure they are financially protected in their older years.
