Long Term Care Planning

Long-term Care Insurance – What Is It & Who Needs It?

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— Last Updated May 27, 2022

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Reviewed by
Eric Berkman

Guide Long-term Care Insurance – What Is It & Who Needs It?

— Last Updated May 27, 2022

Stephanie Wilson

Director of Operations


Reviewed by

Eric Berkman

Long-Term Care Insurance – What Is It & Who Needs It?

A general outlook on long-term care insurance

Long-term care insurance is used to help people pay for long-term care services when they are unable to perform certain acts typically known as activities of daily living (ADLs). Typically, as people age into their mid-60’s and beyond, they’re health deteriorates and they will have trouble performing some of the basic activities of daily living like bathing, getting dressed, and eating, among a few others. Needing help with these everyday activities is typically very costly. One way you can help offset those costs by using the long-term care benefits associated with having a long-term-care insurance policy.

Additionally, individuals who might be suffering from a cognitive impairment such as dementia may also be eligible to take advantage of benefits from a long-term care insurance policy to pay for the costs associated with that type of care.

Disabilities that require long-term care insurance

Long-term care services can be needed by individuals at any time, but are typically needed as people age. Most people who have thought ahead about a plan of care and have invested in long-term care insurance will be able to access their benefits once they hit a point where their health declines.

Long-term care assistance can be needed by individuals at any age, but is typically needed as people age and their health and medical condition naturally deteriorates. Most people who have planned ahead and have long-term care insurance will be able to access their benefits once they hit a point where their health declines.

There is no specific list of disabilities and preexisting conditions that qualify for long-term care insurance. However, individuals with a medical necessity, cognitive impairment, and/or loss of functional capacity are eligible for long-term care insurance. When you’re working with your licensed insurance agent, they will be able to review all of the specifics with you including how to access your benefits of insurance when the time comes.


Long-Term Care Insurance:

  • The type of policy you acquire: In total, there are three types of policies you can choose from. For instance, a “Home Health Care Only” policy allows individuals to receive coverage within their homes. Similarly, a “Nursing Home Only” policy gives coverage to individuals strictly in their nursing homes only. On the other hand, a “Comprehensive” policy will allow an individual to receive long-term care expenses for nursing homes, health care providers inside of their homes, as well as assisted living facilities.
  • Lifetime maximum benefits usually are stated in number of days of coverage and usually range between two years and unlimited coverage.

    Source: mass.gov

  • This type of policy can give you more flexibility to choose where you receive care when the time comes.
  • Daily Benefit: To put it simply, this will be the maximum amount that is paid by an insurance company to the policy holder on a particular day.
  • Benefit Period: The period of time for which you will receive your benefits from an insurance company is called the benefit period. Typically, this period will range between one year up to the maximum benefit period of unlimited coverage. With unlimited coverage, you will be receiving coverage for your entire lifetime.
  • Inflation Protection: Your policy will not have automatic inflation protection. You can opt for whether you would like your benefits to keep pace with inflation or not as time passes by. If you don’t want to inflate your benefits, you will always have your principal amount available to you despite rising inflation over the years.
  • Elimination period: This is the period during which you are required to wait before you start receiving benefits from an insurance company. Typically, the elimination periods can last between 30 days up to a year.


The long-term costs of care for people varies depending on what state you will living in when you need care, what type of care you will need, and how that care will be administered (at home or in a facility). For example, the average cost of a private room in a nursing home in the United States is $102,000 a year, whereas the cost of three years of assisted living + two years of nursing home care is more than $300,000.

Estimated long-term costs of care can be calculated using tools online. These tools will factor in your geographical area and the type of long-term assistance that you acquire to give you an estimated figure. But, you’ll want to connect with a licensed agent to learn more so you can get an accurate picture to help make a plan. It’s always good to know what does disability insurance cover.


Whatever coverage you decide to take out, the annual premium you pay will be far below the above listed care costs.

Two-year, three-year, five-year, and lifetime coverage periods are available with long-term care insurance plans. However, Long-term insurance plans may also include further restrictions on daily and lifetime benefits. Companies have a defined amount of dollars up to which the benefits will be paid to the receiver, and the period of time it takes to pay off this sum is known as the benefit period.


Long-term care insurance is the ideal solution for you if you want to help safeguard your future care options, keep your retirement assets and protect your personal assets. Here are a few benefits that come from choosing long-term care insurance.

Protection of savings

One misconception people have is that long-term Care Insurance only works as coverage for nursing home and hospital costs. In fact, it also provides individuals with coverage that they might require in the long run i.e. before an accident or ailment, during it, and after it. What that means is if you happen to need long-term care insurance to pay for care service when you’re younger, having had an accident as an example, then you will likely be able to do so. This can come in handy if you need some ADL care while you’re younger. You’ll of course want to discuss the specifics of the policy plan you put together with your insurance agent so you can be sure of the coverage if it is needed.

More choices for care

With long-term Care Insurance, you have a wide variety of options for care available, depending upon the type of plan you choose. For instance, if you choose a Nursing Home plan, you will be provided with care in your Nursing Home. Similarly, if you choose a Home Health Care plan, you will be provided with care in the comfort of your own home.

Custodial care

Since long-term care insurance is provided to those individuals who are unable to carry out at least 2 out of 6 of their daily living tasks, you will also be able to take advantage of custodial care if you have a long-term care insurance plan. Custodial services include cooking, bathing, cleaning, and various other necessary functions that need to be carried out during a day.

Who needs long-term care insurance?

Certain criteria need to be met for one to be eligible for long-term care insurance plans. Most people have a misunderstanding regarding long-term care insurance, believing that it is only restricted to individuals of a certain age, such as elderly people. However, that is not the case at all.

Activities of daily living (ADLs)

ADLs (activities of daily living) are basic activities that must be completed each day for a person to survive. ADLs are often divided into the following categories:

  • Personal hygiene: This includes grooming, bathing, oral, hair, and nail care.
  • Continence management: Possessing mental and physical ability that allows one to go to the restroom.
  • Dressing: The ability to choose and wear appropriate clothing for various occasions.
  • Feeding: Whether a person is self-sufficient, or requires assistance to eat.
  • Ambulating: The ability of a person to change positions and walk independently is referred to as ambulating.

Recognizing how each category affects an individual’s ability to care for themselves can make the difference between aging gracefully and independently vs requiring daily assistance. If someone is unable to accomplish two out of six “activities of daily living,” or ADLs, on their own then they may be eligible to access the benefits from a long-term care policy under long-term care insurance policies.

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Choosing a long-term care insurance plan

There is no “optimal” time to get a policy, but individuals typically in their early to mid-fifties will get a policy because they are still typically healthy enough to qualify for the most coverage at the best rates possible.

However, you can’t simply choose a policy that solely matches your requirements. You must first apply and ensure that you are eligible. It is crucial to consider your health and age at the time you apply. There is a risk of not being accepted for Long-Term care insurance plans if you keep waiting. There is also the chance that you might not be able to get the level of coverage that you require.

A few factors should be considered before you opt for a long-term care insurance plan, such as your budget, the coverage you want, and the type of company you’d like to acquire it from. It’s always best to get a loved one involved or to get advice from a professional to help you narrow down your decisions. To a large extent, long-term care planning is something that should be done by talking with your dependents and / or loved one’s since getting an insurance plan won’t just help you, but also those you love.

Who is eligible

Long-term care insurance is available to people of any age. While insurance firms may advise people to get policies as early as 40 years old, Consumer Reports advises people to wait until they are 60 years old. Waiting too long to purchase a policy can result in high premium rates.

Long-term care insurance applicants must be in good health if they want to get a policy with the most amount of benefits at the lowest price possible. However, people in a less than perfect health condition may still get approved, but their benefits and the coverage of their individual policies will not be as good.

If an elderly person’s health status is such that they already requires long-term care or require assistance with activities of daily living such as bathing, dressing, and various other similar activities, they will likely be denied Long-Term care coverage. An elderly person possessing a condition such as AIDS, Alzheimer’s, Parkinson’s, MS, or any other similar conditions will also be denied Long-term care insurance.

Marital status, on the other hand, will not impact your eligibility for long-term care insurance. One good thing to keep in mind, however, is if you’re married and applying for policies for both spouses then you will likely be eligible for a discount. This is something your licensed agent will help you with.


Consider what services you are most likely to use while purchasing long-term care insurance. Choose a plan with insurance coverage options that meet your specific requirements. A few considerations are the following:

  • Home-Based Care

If you think you will be able to be somewhat independent carry out many daily activities and only require assistance with a few activities, then home-based services will be the perfect option for you. Not only will it allow you to some money on your policy, but you can also get all your activities of daily living provided for from the comfort of your own home.

  • Personal Care

This type of service focuses more on home care and does not necessarily concentrate on medicinal or medical-based care. In personal care, one can expect meals to be prepared for them, as well as help with household chores that cannot be carried out by them due to their condition.

  • Companionship Services

If you live alone, or think you might at some point, then you may want to acquire assistance from someone who comes to check on you on a regular basis. This person normally does not assist with personal hygiene or domestic tasks. Instead, they will sit with you, talk with you, and keep you company in between trips to the doctor.

Getting advice from a skilled insurance advisor

You should definitely talk to a financial advisor, or an insurance advisor if you’re considering long-term care insurance. Figuring out how to pay for long-term care, and long-term care insurance can directly impact your assets, income, as well as your lifestyle, so getting advice and assistance from an insurance advisor is definitely recommended. Not only will they help guide you throughout the entire process, but they will also help you in selecting a long-term care insurance plan that will be most suitable for you based on your budget.

What should you look for when applying for long-term care insurance?

There is no standard when it comes to long-term care insurance policies. For this reason, several factors need to be taken into consideration by an individual, to help determine the type of benefits that you will need. The following are key considerations when evaluating the type of policy that will best suit your needs.

Daily/monthly benefit amount

The maximum amount LTC plans will pay for each day of care is the daily benefit amount. Some insurance plans cover this amount when you need nursing home care, but only a portion of it is covered for other forms of care.

Understanding how a daily benefit is calculated and delivered, as well as the amount insurance promises to pay, is critical.

Benefit period

Long-term care (LTC) insurance is often purchased to provide you with benefits for 12 months or more. You can purchase an insurance plan that covers benefits for one year, two years, three years, or five years. Benefits for as long as you live are no longer sold by most companies, but it’s still possible depending on circumstances and the insurance carrier.

Premium discounts

You can choose if your want your benefits to grow in value over time. If you do not opt for inflating your benefit then the principal sum will always be available even if inflation rises over time.

For policies with a built-in 5% compounded inflation protection, you may find your premium amount to be higher than it would be without the 5% inflation protection. For instance, after 14 years, $100 worth of a daily benefit today will double up to $200 worth of benefit with 5% compounded inflation.

If you opt for adding inflation protection sometime later after purchasing long-term care insurance, your premium will be increased by the current cost of that benefit at your current age.

Free look provision

The free look period is the time frame during which a new life insurance policy owner is allowed to cancel the policy without incurring any penalties, such as surrender charges. Depending on the insurer, a free look period for long-term care insurance might run up to 30 days or more.


Some individuals are under the impression that long-term care costs, such as a stay in a nursing home, is covered by Medicare. However, it does not cover much long-term care and that’s not what Medicare is designed for. If you’re planning for your own future or caring for an elderly relative, you will want to consider other alternatives for coverage for long-term care needs.

Skilled care

Long-term care facilities are frequently incorporated into skilled nursing facilities. They are intended for patients who require round-the-clock care and support but do not particularly require skilled care.

How to get the best long-term care insurance?

There are certain steps you can take, and certain factors you need to assess to ensure you can obtain the best long-term care insurance plan. One of the best ways to start doing that is by talking to your loved one’s, doing your research, and then finding a licensed agent to talk to. At Policy Solver, we’re certainly here to help with that. We can also help you frame up how to have the talk with your loved ones.


To be eligible for a Long-Term Care Insurance policy, you must undergo medical underwriting to see if your health meets the insurance carrier’s requirements. The goal is to get your application for Long-Term Care Insurance approved. Your health can deteriorate at any time, so it’s crucial for you to meet certain health requirements to get your application approved, and applying when you’re healthy can help. Every insurance firm has its own set of risk factors and weightings, and those can differ drastically based on certain health issues. One thing is certain, however: if you want medical attention right now to help with care for an activity of daily living, you will most likely not be eligible for coverage.

Since different insurance carriers have varying requirements, working with an insurance broker can save you the hassle of having to individually apply to multiple carriers to see if you’re eligible. A licensed long-term care insurance broker will do all of that work for you, for free.

Health questions

Certain health questions will be further asked to determine whether you are eligible for Long-term care insurance or not. These will generally include questions that ask you about the type of conditions that you have, whether they are pre-existing, if you require assistance from someone to help conduct activities of daily living, and other related questions regarding your daily lifestyle and ability to take care of yourself. 

Long-term care policy at work

Paying some or all of the cost of long-term care insurance is one of the simplest ways for businesses to assist their employees.

Some companies that offer long-term-care insurance allow employees’ extended family members to opt for the plan as well. Individual coverage is available for employees’ spouses, as well as their parents and grandparents. On a case-by-case basis, other relatives, such as siblings, might also be eligible. However, this isn’t a common benefit of most companies so remember that when getting a long-term care plan.

Compare prices

If you’re new to insurance policies, it’s quite easy for you to get tricked into paying twice the amount of long-term care premiums that are required. To prevent something like this from occurring, it’s recommended to always compare monthly premium costs of policies from different companies to make sure that they are not overcharging you. This is another example where working with a licensed long-term care insurance broker can benefit you.

Talking with an experienced long-term care insurance agent

Long-term care insurance differs from other types of insurance in that it requires a conversation with an expert to establish if it is a suitable fit and so you can find the best plan for your needs. Currently, there are no places to fully buy it online without talking to an agent. And given the high complexity of the product and uniqueness of everyone’s situation, it’s best to talk to an expert to help you through the process.

Where can I find out more and get advice on long-term care insurance?

Before making a huge decision like buying long-term-care insurance, it’s critical to do your homework and carry out some research so you can decide on the best possible policy that fits your specific needs. On the Internet, you may find a plethora of disability insurance advisors; nevertheless, selecting the proper one is yet another difficult task.

At Policy Solver we are in the business to help you find the best private disability insurance policy that suits your needs. We are a licensed broker and shop the market, both saving you time and money. We’re here to help, even if you don’t end up buying a policy with us.

Kagan, J. (2021, September 16). Long-Term Care (LTC) insurance. Investopedia. Retrieved October 17, 2021, from https://www.investopedia.com/terms/l/ltcinsurance.asp.

Marquand, B., & Barbara Marquand Barbara Marquand writes about mortgages. (2021, July 16). Long-Term Care Insurance explained. NerdWallet. Retrieved October 17, 2021, from https://www.nerdwallet.com/blog/insurance/long-term-care-insurance/#:~:text=Under%20most%20long%2Dterm%20care,Caring%20for%20incontinence

Long-term disability vs. Long-Term Care Insurance. GEBA Government Employees’ Benefit Association. (2020, November 18). Retrieved October 17, 2021, from https://www.geba.com/long-term-disability-vs-long-term-care-understanding-the-differences/

RTP, S. (2021). Policy Features of Long-Term Care Insurance. Retrieved 17 October 2021, from https://www.bluewaterportfolios.com/policy-features

Long-Term Care Insurance Costs by State and Region | New York Life. (2021). Retrieved 17 October 2021, from https://www.newyorklife.com/products/long-term-care-insurance/costs-of-care

Protect Your Assets With Long-Term Care. (2021). Retrieved 17 October 2021, from https://www.ieeeinsurance.com/ieee-us/articles-and-resources/protect-your-assets-with-long-term-care.html

Long-Term Care Insurance: What to Know. (2021). Retrieved 17 October 2021, from https://www.webmd.com/health-insurance/features/understanding-long-term-care

Us, A., Team, O., Services, E., HICAP, A., COUNSELING, M., & Sheets, F. et al. (2021). Items to Consider Before Buying Long-Term Care Insurance – California Health Advocates. Retrieved 17 October 2021, from https://cahealthadvocates.org/long-term-care/items-to-consider-before-buying-long-term-care-insurance/

Application Process. (2021). Retrieved 17 October 2021, from https://mccannltc.net/resources/application-process

Stephanie Wilson


October 28, 2021

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