Long Term Care Insurance, Long Term Healthcare Insurance, LTCI

Long term care insurance is chosen by people to cover their long-term care expenses associated with an assisted living facility at a later stage of life. Usually people aged 65 or above take this policy, although nowadays even young people are opting for long term care insurance (LTCI). Taking such insurance earlier in life means that the premium would be lower and the benefits of the policy can be availed before one reaches the age of 65. Long term care can range from a few months to a few years. One can get the payment for the services availed in full or offset.

According to experts, approximately 60% Americans need long term care after the age of 65 years. This could be follow-up care after surgery, senile dementia, terminal illness or permanent disabilities. The policyholder can pay for the services related to such needs availed through long term care insurance. Medicare, Medicaid and health insurance usually do not cover long term care insurance. LTCI can be tax qualified (TQ) or non-tax qualified (NTQ).

What are the types of Long Term Care Insurance (LTCI)?

Skilled Nursing Care: Physicians sometimes prescribe this type of care. To help the patient recover completely from an illness, the physician formulates a treatment plan, while an authorized nurse provides care.

Intermediate Nursing Care: This also has to be ordered by a physician to help the patient completely recuperate from the illness. The patient does not get intermediate nursing care on an everyday basis, as in the case of skilled nursing care. Intermediate nursing care is based on the treatment plan prescribed by the physician.

Custodial Nursing Care: Under this type of long term care insurance, the patient gets full coverage. The patient is provided everyday nursing care, apart from help in eating, walking and bathing. Custodial nursing care may also include the use of a catheter and colostomy. Patients can choose from an in home care plan, a nursing home plan or an assisted living care plan, as per their requirements. Custodial care can be for few hours a week or 24 hours a day.

What Should One Look Out for While Choosing a Long Term Care Insurance Plan?

Before taking a long term care insurance policy, one should ensure that the insurance company has been operating successfully for decades and is unlikely to go bust in the future. The policy seeker should decide upon the elimination period, i.e., the duration for which s/he will pay out of his/her pocket for the expenses before the insurance carrier starts paying. Usually the available options are 0 days, 60 days or 90 days.

Insurance companies also offer the facility of inflation adjustment. One needs to decide the coverage length, which is generally 2.5 years of nursing home stay. One can even opt for infinite care as per the requirement.

One has to be careful about balancing the costs and risks associated with outliving long term care insurance. One should also consider the duration for which the insurance carrier will offer coverage.