Navigating the world of health insurance can be intimidating, and for good reason! There are so many things to consider; coverage options, changing deadlines, and hidden fees among many others. This is particularly true for vital healthcare that must last over a long period of time and once you’re later in life, such as long-term insurance for assisted living. As the name suggests, long-term insurance is an insurance policy designed to cover services and support that are long-term such as custodial care. It is also known as long-term care insurance.

An important aspect of long-term insurance is that it can often help cover services that regular healthcare cannot. This makes it an essential care type for so many; as we age, it becomes more and more likely we will need daily assistance. In this article we will discuss all that you need to know about long-term insurance, including how it can be used to help with assisted living. Let’s start with the most important question: what is long-term insurance?

Basics of Long-Term Insurance

Before you can truly begin to assess the importance of long-term insurance for assisted living, you must know what long-term insurance actually is! Keep in mind that working with a trusted insurance agent will be incredibly beneficial for navigating the confusing waters of healthcare.

Definition

Strictly speaking, long-term insurance is used to cover and assist with the cost of long-term care services, as most traditional health insurance cannot and will not help cover long-lasting issues that affect one’s daily living activities. As you get older, it is more likely that you’ll require assistance in daily activities such as bathing and dressing. Daily tasks like this are known as ADLs or Activities of Daily Living. This can also extend into staying at a long-term care facility which is a place where you can receive nursing care to help with ADL issues. Whether you are at home or in a facility, having long-term personal care services are vital to your health.

It is important to know that long-term care is not necessarily medical care, but rather assists with frequent and necessary daily tasks. When finding your long-term insurance plan, you will decide on the coverage you need and pay premiums each month. A premium is the payment you make to your insurance company. You pay monthly premiums for long-term insurance, and when you need a service like assisted living and homemaker services, it will be ready for you.

What It Covers

While covered care will vary between plans and companies, there are some basic ways to measure the need for long-term care that insurance typically makes sure to cover. These are divided into at least two categories: Activities of Daily Living or ADLs, and Instrumental Activities of Daily Living, or IADLs. ADLs are essential to everyday life, and can include the following:

• Bathing
• Dressing
• Using the bathroom
• Eating
• Transferring, or moving from place to place

In contrast, IADLs are not as essential, but still required to have a good quality of life. These activities are more wide-ranging, and can include:

• Using the telephone
• Going grocery shopping
• Caring for pets
• Housekeeping
• Managing medication

Most long-term care insurance policies will also cover needing to receive services in facilities outside of your own home, such as assisted living care in a dedicated facility. When you are unable to complete multiple ADLs, you qualify to receive the benefits from a long-term insurance policy if you have it. It can also cover the cost of caregivers coming directly to your home. Note, long-term care insurance will not cover the costs if you need some care or help for IADLs. Remember there is a lot of difference between long-term disability vs long term care insurance.

Advantages

When you’ve spent a long period of time building up retirement savings, it can be frustrating to see medical costs and long-term assisted living costs eat into those savings and ruin your retirement planning. That is why many people recommend long-term insurance. We may not imagine that we need it now, but when it comes time to use it, we will be glad to have it! Here are some of the primary benefits of long-term insurance.

• Flexibility. You will find that your long-term insurance plan can be altered to fit your specific needs and wants. You can essentially guarantee as much or as little coverage as you need.
• Inflation protection. Health care prices can inflate and rise over the years, and long-term insurance can be impacted due to it. Luckily, when you create the plan you can include inflation protection options as a policy rider.
• Affordable premiums, especially in comparison to care. To ensure you actually have long-term insurance in place, you’ll pay a monthly premium. Other payments such as deductibles and copays will not go into effect until you actually need the long-term care. When you do need care, you’ll find that those premium costs are a fraction of the annual costs, even one year of care services, without insurance.

Disadvantages

Just as long-term insurance has advantages, you can expect some disadvantages. It is important to be aware of both aspects in order to make the best informed decision. Many disadvantages of long-term care insurance involve the fact that it must be planned years in advance. You can still get long-term care for your parents, it’s not too late to plan for them.

• You may never need your insurance policy . There is a chance that you will never end up needing long-term insurance, and the annual premiums you consistently paid are essentially wasted. It is comparable to auto and home insurance in this way – there just in case, but not guaranteed to be needed.
• Premiums may increase many years after they begin. While inflation protection is typically an option, it is not guaranteed with every plan. There is also a chance that insurance companies may need to raise the monthly cost of premium rates over time, after you begin working with them as a client due to changing company costs.
• There is a waiting period before long-term care benefits kick in. The waiting period for policy benefits changes depending on which plan you have and what carrier you have it with. Once you begin needing your care benefits, you may need to wait up to 90 days before you’re able to access your benefits.

Now, you can learn more about long-term insurance while being aware of the pros and cons. Let’s move into the next aspect of long-term care and ask the question: does long-term insurance cover assisted living?

Does Long-Term Insurance Cover Assisted Living?

In sum, the answer is yes. The majority of plans will offer coverage at assisted living facilities as long as it is demonstrated that they will help with long-term care. However, you cannot blindly assume that every plan and individual policy will include this coverage.

Understanding Long-Term Insurance for Assisted Living

An assisted living facility is meant to provide care and oversight for the elderly who are mostly healthy, but require assistance with a few personal or household tasks. It is a less intensive type of care than a nursing home facility’s care and solves many of the worries that come with living independently. If assisted living is something that you want to include in your long-term care insurance plan, you should make this clear from the start and discuss that with your insurance agent.

Some long-term insurance may only pay for facility services as opposed to in-home care, making assisted living all but guaranteed. The premium you pay to your company will eventually cover assisted living as well as general long-term care. In the end, it is vital that you check your specific policy to ensure you will be able to use your long-term insurance for assisted living. Consider finding a trusted insurance agent to help you navigate this.