Long Term Care Insurance

Most people don’t think about their long term care insurance until it is too late. Many assume that they will either never need long term care or won’t need it until they grow old. Unfortunately, this is not always the case. In fact, 40% of people who received long term care insurance (LTCI) in 2013 were between 18 and 65 years old. The fact is that we don’t know what will happen, so we need to be as prepared as possible.


LTCI is a type of policy that extends beyond the coverage of a regular health insurance package to cover home care, assisted living, hospice care, and nursing home costs. Age is not the determining factor in whether a person will need care insurance; those receiving care may not be sick in the conventional sense but are unable to perform activities of daily life like walking, dressing themselves, bathing themselves, etc.


There are several different types of long term insurance policies available: tax qualified and non-tax qualified. Tax qualified policies require that the patient be unable to perform at least 2 activities of daily living or need assistance due to cognitive impairment for at least 90 days. Non-tax qualified policies only require that the patient be unable to perform 1 activity of daily life; a doctor is also required to state to the insurance company that it is medically necessary.


Work benefits are slowly expanding to include these types of policies. Long term insurance is available as an extention to many employee benefits packages, but completely at cost to the employee. The employer may in some rare cases offer to pay a portion of this extended coverage, but employees should expect to pay the full amount.


While government programs exist that provide long term disability coverage, they only pay out small amounts to supplement the patients’ income while they are unable to work. A LTCI policy is a great option to add to any existing benefits package for extended coverage.

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