Long-Term Care Insurance

What is Long-Term Care Insurance?

Long-term care (LTC) insurance covers the cost of care when you can no longer perform daily activities independently due to chronic illness, disability, or cognitive impairment. Medicare and health insurance typically don't cover these expenses.

What LTC Insurance Covers

Benefit Triggers (When Benefits Begin)

Benefits typically start when you can't perform 2 of 6 Activities of Daily Living (ADLs):

1. Bathing
2. Dressing
3. Eating
4. Toileting
5. Transferring (moving from bed to chair)
6. Continence

Or with cognitive impairment (dementia, Alzheimer's)

Policy Components

Cost Factors

• Age at purchase (younger = cheaper)
• Health status
• Benefit amount and period
• Elimination period length
• Inflation protection option

Alternatives to Traditional LTC Insurance

• Hybrid life/LTC policies
• Annuities with LTC riders
• Self-insurance (personal savings)
• Medicaid (spend-down required)