What is Long Term Care Insurance?

The need for long-term care is assessed based on your ability to handle the six basic activities of daily living:

• bathing
• dressing
• feeding yourself
• using the toilet
• getting out of bed or a chair
• keeping bladder and bowel control

Generally, if you lose two of these abilities, you qualify for benefits from a plan. How you use the benefits depends on the type of plan.

Income plan

This provides a weekly income to spend as you like – on nursing care in your home or in a long-term care facility. The income plan even allows you to hire a family member to care for you.

Reimbursement plan

This type of plan operate slightly differently. They reimburse the actual cost of a qualified care provider.

Indemnity plan

These plans offer a lump sum daily while you need long-term care.

Ask how long benefits will last. Some plans cover 250 weeks, some cover 500 weeks, and some last for life. This is one of the key factors in determining the premiums.

You don't have to provide family history to qualify for long-term care coverage. However, older buyers may have to pass a cognitive test. As with many insurance plans, the premiums are lower when you buy at a younger age, but people can buy long-term care insurance well into their 70s. When you buy a plan, be sure to ask if it offers inflation protection. Also ask if there is an option to return your premiums if you never need care.