Long-Term Care Insurance


4 min read

Long-Term Care Insurance


Caregivers and Family Paying for Senior Care

We tend to buy insurance for things we hope and expect never to need: Flood insurance for our home, collision insurance for our car, indemnity insurance for hospital stays. Yet while nearly half of older adults will need paid long-term care assistance at some point in their lives, many don’t have insurance for this predictable and potentially big-ticket expense. Here’s what you need to know about getting you and your loved ones covered.


What is long-term care insurance?

Traditional long-term care insurance policies reimburse for the cost of paid assistance with activities of daily living such as eating, dressing and bathing. The care may be provided either at one’s home or in a senior living facility, and is covered at a daily amount specified within the policy. If the policyholder ends up not needing long-term care, they (or their families) don’t collect any benefits.

Hybrid long-term care policies, which typically combine long-term care coverage with life insurance benefits, have become more popular in recent years. These policies tend to be more expensive, but they offer a life insurance payout in the event the policyholder doesn’t use the long-term care benefits.


What can I use it for?

Long-term care insurance typically covers skilled nursing care, therapy and help with activities of daily living. Many—but not all—policies cover assisted living, so if assisted living is part of your family’s plan be sure to find a policy that allows for it.


How much does it cost?

The cost of long-term care insurance varies widely based on the age of the policyholder when it is established, the reimbursement rate, and how many years the policy will pay. According to the American Association for Long-Term Care Insurance, a single female starting a traditional policy at age 55 would pay around $1,500 per year for $165,000 worth of coverage; the same coverage begun at age 60 would cost $1,960 per year, and $2,700 per year starting at age 65. For a higher annual premium, policyholders can select benefits that grow at a predetermined percentage each year to compensate for future inflation.


What’s not included?

 Policy terms vary, but often they do not cover care related to alcoholism or drug abuse, or preexisting conditions for a fixed period of time after the policy takes effect.


Who is eligible?

 Policyholders generally are eligible to start collecting benefits once they are cognitively impaired or unable to complete a set number of activities of daily life. They usually must also wait out the ‘elimination period’—normally a 90-day waiting period from when they start needing care until benefits kick in.


How do I get it?

Insurance agents, brokers and financial planners sell long-term care coverage directly, but offerings are state-regulated and vary depending on location. For help finding an insurer in your area, visit LongTermCare.gov.


When should I get it?

 The American Association of Retired Persons recommends starting the long-term care insurance conversation in your 50s and locking in coverage by age 65. Premiums increase according to the age of the policyholder, and beyond age 70 nearly half of prospective new policy applicants are denied.


Contemplating the next chapter in your loved one’s story? Click here to learn more about Bickford Senior Living and to find a branch near you.