By Julie Elaine Brown, M. A.

Long-term-care insurance is a type of disability insurance designed for medical conditions that require long-term medication, rehabilitation, or nursing care. Long-term- care insurance is different from long-term disability insurance.

Unlike many traditional insurance plans, long-term-care insurance covers daily living needs, physical therapy needs, around-the-clock nursing care, or cognitive impairment therapy (such as cognitive therapy for those with Alzheimer’s disease).

Do I Need Long-Term-Care Insurance?

Long-term-care insurance is the type of insurance people need when they are no longer able to perform daily activities, such as bathing or dressing themselves. If you are reading this Website and are in general good health, chances are, you’ve never considered needing this type of insurance. But, as with many illnesses, we never know what our future circumstances may be.

Medicaid may cover many costs for nursing home care, and doctor or hospital bills, but it usually does not cover the costs associated with at-home nursing care, or rehabilitation programs. Most traditional medical insurance plans will not cover costs associated with daily living requirements. Long-term-care insurance is a way to help defer additional costs associated with long-term disabilities. Most people who have long- term care insurance use it in conjunction with traditional health care coverage.

It has been estimated that 60 percent of us who reach age 65 will need long-term-care at some time in our lives.¹

You should consider long-term-care insurance if you want to:

• Protect your assets and income in the event of a long-term disability
• Avoid being financially dependent on others
• Maintain choice on how and where to receive care

Key Benefits to Look For

As you consider long-term-care insurance, look for plans that offer coverage for:

• Nursing home care
• Home health care
• Services provided in assisted living facilities
• Services provided in adult day care centers

According to the Federal Long Term Care Insurance Program, additional benefits of long-term-care insurance may include:

• International coverage if you want long-term care abroad

• Informal care, or coverage for care given in your home by friends, family members, and other non-licensed caregivers who don't normally live in your home
• Caregiver training, or coverage of training of a family member or other informal caregiver, to care for you
• Respite care which provides temporary care if your informal caregiver (such as a family member) needs to take some time off
• Return of premium on death which returns to your estate a portion of the premiums you paid, less any benefits paid or payable, depending on your age at death

How to Choose a Policy

In general, be sure to conduct as much research as possible on the company and each plan you consider. Ask friends and family for the names of trusted insurance brokers, and be sure to choose a company that is established and will still be around if and when you need to file a claim!

You may also want to buy a book to educate yourself on different types of insurance.

One good book is Insurance for Dummies (Wiley, 2001). Consumer Reports is another good source of information.

Long-term-care insurance can be very expensive, so be sure that you can pay each premium on time before signing up for a plan.

¹"Where does the Population Live and Who Cares for Them? LTC: Diverse, Growing Population Includes Millions of Americans of All Ages," U.S. General Accounting Office 1/01.