You may have heard of long-term care insurance talked about by folks who are preparing to retire, or perhaps taking care of their parents. But do you know what it is?
Long-term care insurance is exactly what it sounds like: Insurance that helps protect against the high cost of long-term care. Long term care insurance generally covers the cost of home health aides, skilled nursing, assisted living, and nursing homes.
Long-term care is most often needed after a stroke, a vehicle or other serious accident, or due to debilitating conditions like Alzheimer’s disease, rheumatoid arthritis, multiple sclerosis or diabetes. Long-term care can generally be divided into the categories of in-home and in-facility care.
In-home long-term care commonly includes assistance with household tasks like cleaning, cooking, and running errands, assistance with personal care activities like bathing and dressing, and professional health care from nurses, who can help with IVs, medications, and other, more complex health issues.
In-facility long-term care commonly includes daytime social and therapeutic activities conducted at a qualified adult care facility during the day (while the individual continues to reside at home), assisted living facilities that provide on-site support to facility residents, and nursing homes, which provide more skilled and intensive care, supervision, medication, therapies, and rehabilitation than assisted living facilities.
Not everyone requires long-term care, but according to the federal government, almost 70% of people turning age 65 will need long-term care at some point in their lives. And of course, long-term care expenses can be extremely high - in the hundreds of thousands of dollars for nursing homes, for example. Additionally, the likelihood of needing long-term care increases with age. Correspondingly, the younger you are when you purchase long-term care insurance, the lower the premiums will be, and the higher the likelihood you'll be approved for a policy. Thus, you may want to start shopping for a policy in your forties. And hopefully, like all insurance policies, you'll never need this one.