What is long term care insurance?

It is coverage that covers the costs of care that is needed when a person can no longer care for themselves and are unable to do two or more of the six activities of daily living.

These six recognized activities of daily living are bathing, eating, dressing, continence, toileting and transferring. An example of transferring is getting out of bed, or moving from one point to another.

LTC insurance will pay for this kind of care at home, in an assisted living facility, a nursing home, adult daycare or Hospice up to the benefit amount that you choose. It is not just nursing home insurance.

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Long Term Care Insurance Policyholders


Here are some national long term care statistics:

  • The average usage of care for an individual is 2.8 years.

  • The nationwide, average cost per year for a nursing home is $75,000.

  • The nationwide, average cost per year for assisted living is $36,000.

  • One out of three men will use LTC in their lifetime.

  • One out of two women will use LTC in their lifetime.

  • The average man diagnosed with Alzheimer's uses 4.7 years of long term care.

  • The average woman diagnosed with Alzheimer's lives 5.7 years.

  • 39% of Medicaid (not Medicare) recipients in long term care are under the age of 60


What about disability insurance? How does it differ from ltc insurance?

If someone has disability insurance then typically 66% of their income is replaced which goes towards their everyday cost of living, but what if as a result of their disability, they also need help with two or more of the above mentioned activities of daily living. In that case, they must hire caregivers to come into their home or pay to receive this care in a facility.

What about Medicare?

Most people are unaware that Medicare does not cover the cost of long term care beyond 100 days of skilled rehabilitative nursing care. You must have a 3 day in-patient hospital stay, and your Medicare supplement must cover the cost of the co-pay for days 21-100. The first 20 days are fully covered.

Long-term care insurance is an excellent option because it not only includes financial protection, but it is a plan that your spouse or family can implement without a crash course in care coordination. Care coordination is implemented by a professional coordinator who adheres to your wishes. By purchasing this protection you can shield your retirement savings from being used up by this type of care. This prevents family from having to start with the phonebook and proceed to learn what, where, who, how, and why. this can take a trmendous amount of time out of a family or friends life that they may not be able to afford due to a job or their family obligations.

When individuals cannot perform two of the six activities of daily living they become eligible to use their insurance plan.  A cognitive deficit also qualifies for full benefits even if you can do all six activities of daily living. These two different ways of triggering the use of your plan are certified by your personal physician or licensed healthcare practitioner. All plans have this written within them.

With medical science extending life but not necessarily the quality of life. Long-term insurance has become the number one way to protect against this type of financial catastrophe.  It also protects family from having to take a leave from work or spend large amounts of time away from their spouse and children. In other words, it takes the burden off of family.


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