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THE BASICS
Essentially, long-term care insurance provides financial protection should you
become unable to care for yourself because of a chronic illness; disability; cognitive
impairment, such as dementia; or other age-related conditions preventing you from
managing a number of the activities of daily living without assistance. It can cover
stays in nursing homes and chronic care facilities or the services of a caregiver in
your own home.
Generally speaking, there are two types of long-term care insurance plans:
• One reimburses you for eligible expenses that are outlined in your plan
(such as homemaking or private nursing services) that you may incur on a
given day, up to a pre-determined maximum.
• The other is an incomestyle plan, which offers a pre-determined monthly
benefit amount.
With an income-style plan, the regular benefit you receive (e.g., monthly, weekly)
can be spent any way you choose. You can use it to help finance your care in a
residential facility, for in-home care services or to pay someone in your own family
to look after you.
Most plans include a waiting period. This means once you qualify for benefits, you
must wait a specified period of time before your benefits will be payable. Common
waiting periods are between 30-90 days.
What is long-term care insurance?
TIP: You may want to consider including long-term care insurance in your estate plan-
ning with the intention of helping you stay in your own home for as long as possible.
TIP: Ask about the length of time you must pay premiums and whether they are waived
or discontinued when you make a claim and are receiving benefits.
