Basics of long-term care insurance

R-H Staff

METRO — Various insurance plans protect individuals from financial calamity. Insurance works by requiring policy holders to pay a premium. In the event of an accident or incident, a claim can be filed and the insurance company will reimburse the person for expenses, minus the deductible.

Health insurance is one type of insurance that people have to manage their health and well-being. ThereÕs also another, perhaps lesser-known insurance that can prove invaluable. It is called long-term care insurance.

Long-term care insurance, or LTCI, is an insurance product that is found primarily in the United States, Canada and the United Kingdom. LTCI generally covers assisted living needs, home care, hospice care, adult daycare, and other requirements of senior living and/or health management. People who invest in LTCI are planning ahead for the times when they may no longer be able to care for themselves without assistance. LTCI will help offset the ever-rising costs associated with specialized senior housing and nursing facilities.

Traditional healthcare insurance and government-sponsored plans (i.e., Medicare in the United States) will not pay for daily, extended care services. The AARP notes that these other plans may only cover a short stay in a sub-acute rehabilitation center or nursing home, or pay for a limited amount of at-home care. LTCI can help families finance the cost of medical care when all other options will not.

LTCI should be looked into early in life, as policies often cost less if purchased when one is younger and in good health. People in poor health or already receiving long-term care services may not qualify for LTCI outright. But there are some workarounds, including buying a limited amount of coverage or coverage at a higher ÒnonstandardÓ rate. Some policies do not require medical underwriting, and these may be advantageous to people with preexisting health conditions.

When shopping for policies, look into how long LTCI will pay. Some policies include limits on how long or how much providers will pay for care, with some plans maxing out at two to five years. Other policies may not implement a term limit.

Speak with a tax specialist as well, as premiums paid on a long-term care insurance products may be tax deductible.

Long-term care insurance is a way for individuals to finance the often expensive costs for medical services that may be required as one ages.

R-H Staff