Long-term care needs aren’t covered under traditional insurance, which is why many opt to secure supplemental long-term care insurance. It’s designed to help pay for care when you need ongoing assistance with daily activities, supervision, or additional support. This could be due to age, illness, injury, disability, or cognitive decline.
While the exact coverage depends on the specific LTC policy, many policies may help pay for care at home, in assisted living facilities, in nursing homes, or in other approved care settings. Below, we’ll go through long-term care insurance in more detail.
What Is Long-Term Care Insurance Designed to Cover?
Long-term care insurance is not the same as health insurance or Medicare. Instead, it’s designed to close the gap between coverage to help you get the care you need.
According to the National Institute on Aging, long-term care often includes services and support for people who need help with activities of daily living (ADLs). This can include bathing, dressing, eating, toileting, transferring, and continence.
Once you qualify for care, you have options for the type of care you receive, including in-home care, nursing home, assisted living, adult daycare services, and more.
In-Home Care Coverage
The Administration for Community Living shares that when possible, individuals most often prefer to receive care at home as they age. Thankfully, many long-term care insurance policies will pay for a variety of in-home care services. This can include:
- Home health aides
- Personal care attendants
- Homemaker services
- Home caregivers
The services you receive vary depending on the type of in-home care you are receiving and what your policy covers. It can include help with bathing, dressing, meal preparation, mobility, and basic household tasks.
Assisted Living Coverage
Assisted living is a great option when you need help with daily activities, but you don’t yet require full-time skilled nursing care. It provides a sense of independence while still offering support as needed.
Long-term care insurance can cover assisted living facilities, including housing, meals, personal care, social activities, and support services. The exact services vary based on the facility.
This can also include personal care, meals, medical services, and programs for individuals with Alzheimer’s disease or other forms of dementia, according to the National Institute on Aging.
Nursing Home Care Coverage
Long-term care insurance can cover nursing home care when you need a higher level of supervision, personal care, or skilled nursing support.
Because of the personalized and dedicated care, nursing home care is often the most expensive form of long-term care. On average, a private room in a nursing home can cost nearly $130,000 annually, and that cost is only expected to rise.
Because this is a known cost, many people factor in long-term care costs as part of their retirement planning. Securing a long-term care insurance policy can help reduce the out-of-pocket cost and make nursing home care more affordable, despite the high costs.
Adult Day Care Coverage
Adult day care provides supervision during the day while allowing you to continue living at home. This support can help relieve pressure on family caregivers while still allowing the individual to continue living at home.
Adult day care or adult health services provide supervision, meals, activities, and support for individuals during the day. Studies suggest this type of care can improve well-being and enhance quality of life, providing both structure and opportunities for socialization for older adults.
Memory Care and Cognitive Impairment
Those with Alzheimer’s disease, dementia, or another cognitive impairment may need specialized care. This may include additional supervision, training, and other resources to help support those in need of memory care.
Long-term care insurance can cover care for memory and cognitive impairment in various settings, including at home, assisted living, secure units, and more. The specific type of memory care available will vary based on your policy and your personalized care needs.
Common Benefit Triggers
LTC insurance policies often need to be triggered before coverage will begin. The two most common triggers include:
- Needing help with two or more activities of daily living
- Having a severe cognitive impairment that requires supervision
Each LTC insurance policy can define benefit triggers differently, so it’s important to understand what yours are, any exclusion periods you need to meet, and other specific details that will inform how and when your care is covered.
What Long-Term Care Insurance May Not Cover
Just because you qualify for long-term care doesn’t mean that all services will be covered. There are often exclusions and limitations. The most common are:
- Care that does not meet the policy’s requirements
- Services from unapproved providers
- Care before the elimination period is met
- Certain pre-existing condition limitations
- Informal family care
- Expenses above the policy’s daily or monthly benefit limit
In these and other instances, you can still receive care; however, it will not be covered by your long-term care insurance plan, so you will need to pay out of pocket.
Policy Limits That Affect Coverage
Not all LTC policies are created equally, so it’s critical that you read the fine print to understand what is covered under your specific policy prior to buying or using your coverage.
- Daily or monthly benefit amount: the maximum amount your policy will pay out on a daily or monthly basis.
- Benefit periods, including if you can receive care for two, three, or five years, or the duration of your lifetime.
- Elimination period, or the amount of time you need to pay for services out of pocket before coverage kicks in.
- Inflation protection, or how the value of your policy keeps up with the rising cost of care.
- Covered care settings, explaining the types of care you can use your policy on.
- Provider requirements, or any specific requirements or certifications providers need to have to be covered.
- Shared care or home care provisions for coverage, if applicable.
Before you secure long-term coverage, you should understand what type of care you may need in the future, how long you want to secure coverage, and take stock of your personal finances. This will help you pick a policy that works for you, your future care needs, and your budget.
Why Every Policy Should Be Reviewed Carefully
Even if two policies look extremely similar, they may not be. Their terms may define care differently, so it’s critical to review the policy carefully before securing coverage.
Review your policy’s exact language, taking note of:
- Benefit triggers
- Exclusions
- Home care rules
- Inflation options
- Provider requirements
Ensure they meet your needs before you purchase a policy. If you aren’t sure about what you may need and how it will fit into your personal finances, check out the National Association of Insurance Commissioners’ guide to purchasing long-term care insurance. You can also consult with financial or long-term care insurance professionals to answer your questions.
Do not secure coverage if you don’t understand the cost of long-term care insurance both now and in the future, as well as what it will cover.
Talk Through Your Coverage Options With Raymond Lavine
Raymond Lavine of Lavine LTC Benefits has been helping clients secure long-term care coverage for nearly two decades. He breaks down the complexities of LTC insurance in easy-to-understand terms, explaining what different LTC insurance policies may cover and comparing benefit periods and inflation options.
Raymond is well-versed in helping individuals, couples, and families choose coverage that fits their needs, budget, and long-term care planning goals. Reach out today to schedule a conversation with him to experience firsthand why he has been a trusted advisor for long-term care insurance in Washington, Oregon, California, Colorado, Arizona, New Mexico, and Nevada.
Conclusion
Your care needs change as you get older, and long-term care coverage can help close the gap when traditional insurance can no longer meet your needs. Long-term care insurance can cover a wide range of services, including in-home care, assisted living facilities, nursing homes, adult day care, and memory care.
The right LTC policy depends on where you want to receive care, how much protection you need, and what limitations or exclusions apply. Consult with a long-term care professional to help you understand your options.
Lavine LTC Benefits can help you secure a policy that meets your needs and your budget. We provide you with peace of mind knowing that whatever your long-term care needs will be in the future, they are within reach thanks to your comprehensive LTC insurance policy. Contact us today to start a conversation.
Frequently Asked Questions
What Does Long-Term Care Insurance Cover?
Long-term care insurance can cover services that are not typically included in traditional insurance policies. This includes in-home care, nursing homes, assisted living facilities, adult day care, and memory care.
Will All My Long-Term Care Needs Be Covered?
Each policy is different, so you need to review your policy terms to ensure selected care is covered prior to securing it. You can consult with a long-term care insurance professional if you have questions.
What Elements Should I Review in My Long-Term Care Policy?
You should understand your benefit triggers, exclusions, home care rules, inflation protection, and provider requirements. Each of these elements may impact the type of care you are eligible to receive once you qualify.