Insurance
Long-Term Care Insurance
Long-term care insurance is coverage that pays for extended care services not covered by health insurance or Medicare, including nursing home care, assisted living, and in-home care.
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Exam Tip
LTC triggers: can't do 2 of 6 ADLs OR cognitive impairment. Medicare does NOT cover LTC.
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
| Service | Description |
|---|---|
| Nursing Home | 24-hour skilled nursing care |
| Assisted Living | Help with daily activities |
| In-Home Care | Care provided in your home |
| Adult Day Care | Daytime supervision and activities |
| Respite Care | Temporary relief for family caregivers |
Benefit Triggers (When Benefits Begin)
Benefits typically start when you can't perform 2 of 6 Activities of Daily Living (ADLs):
- Bathing
- Dressing
- Eating
- Toileting
- Transferring (moving from bed to chair)
- Continence
Or with cognitive impairment (dementia, Alzheimer's)
Policy Components
| Component | Description |
|---|---|
| Daily/Monthly Benefit | Maximum paid per day/month |
| Benefit Period | How long benefits last (2-5 years or lifetime) |
| Elimination Period | Waiting period before benefits start (30-90 days) |
| Inflation Protection | Increases benefits over time |
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)