Long term care insurance (LTC) is designed to cover long-term services and supports, including personal and custodial care in a variety of settings such as your home, a community organization, or other facility.
LTC insurance policies reimburse policyholders a daily amount (up to a pre-selected limit) for services to assist them with activities of daily living such as bathing, dressing, or eating.
Many people think the phrase “long-term care” refers to an insurance policy. While insurance may be part of your strategy, long-term care encompasses everything from long-term services and supports and finances, to where you will live and how you will navigate the myriad of legal, family, and social dynamics along the way.
The cost of your long term care policy is based on:
- How old you are when you buy the policy
- The maximum amount that a policy will pay per day
- The maximum number of days (years) that a policy will pay
- The maximum amount per day times the number of days determines the lifetime maximum amount that the policy will pay.
- Any optional benefits you choose, such as benefits that increase with inflation
Just as there are many kinds of long-term care services and supports, so is there a wide range of costs for them. Some people may qualify for a public program to help pay for care expenses. Most people use a combination of options, including LTC insurance, personal income, savings, cash value from life insurance, annuities, and reverse mortgages so they can pay for the care they require. As our population ages, new financial products are offering yet more options.
So how does LTC insurance fit in your financial picture? Does it make sense for to own a LTC policy? Why would you purchase a LTC policy? If you have asked yourself these or similar questions, contact us today to start the planning discussion.