Long-Term Care (LTC) Insurance

Long-term care (LTC) insurance pays for services to help individuals who are unable to perform certain activities of daily living (ADL's), such as eating, bathing, or dressing without assistance, or require supervision due to a medical or cognitive condition.

How do I know if I should get long-term care insurance?

In today's world, people are living longer. Because of this, some people, due to old age, illness, or injury, find themselves in need of help with some daily living activies. Such aid is very expensive. Long-term care insurance gives you peace of mind that, in the event you encounter the need for such assistance in the future, you will not be faced with crippling medical expenses or limited choices due to cost.

If you're not sure about LTC insurance, consider the following:

  • Medicare does not pay for custodial care.
  • In order to qualify for Medicaid, the individual must liquidate all assets down to $2,000.
  • If you need assistance, do you have the financial means to afford such care, whether it be home health care, assisted living, or a stay in a nursing home?
  • In 2008, the average stay in a nursing home was 2 1/2 years at a cost just under $70,000 per year. The cost is expected to rise to $200,000 by 2016.

It is generally accepted that you should consider purchasing long-term care insurance, unless the following exceptions apply: your financial resources are small enough to qualify for Medicaid quickly, or if you are wealthy enough to self-pay.

The ideal age to acquire long-term care insurance is between 55-60; the costs for premiums go up as you get older.

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Quick Facts

  • Couples aged 65 or older have a 70% chance that one of them will need some form of long term care in their lifetime.
  • Average cost of nursing home care in 2008 was just under $70,000/year.
  • By the year 2016, the cost is expected to reach $200,000 per year.
  • Medicaid will only provide assistance after an individual has spent all their assests down to $2,000
  • As much as children would like to help their parents, the reality of life; time and finances, usually hinder those efforts.