Long-term care is a broad term for various assistance programs for the elderly and disabled who cannot care for themselves. Assisted living facilities, nursing homes, and adult day care centers can provide long-term care services.

A long-term care insurance policy is designed specifically for this purpose. A medical and non-medical service plan pays for the services provided in various settings to senior citizens who can no longer care for themselves.

Different insurance providers use varying criteria to assess eligibility. LTCI coverage is not available to everyone, and there are specific requirements one must meet to qualify. Though LTCI plans vary in specifics, to qualify for long-term care insurance, here are some things you need to know.

Why choose long-term care insurance

Long-term care can quickly deplete retirement savings due to its high cost. In this regard, long-term care insurance is recommended for those who can afford it. Seniors can get the best care possible with this coverage and protect their retirement funds.

With long-term care policies, you won’t have to worry about paying out of pocket for your medical expenses as you age, whether in a nursing home, an assisted living facility, or at home with a caregiver. 

Many individuals can save their nest egg and remain in their homes for longer. Alternatively, long-term care can be funded by social security, a government program, a reverse mortgage, and more if you do not have LTCI.

How Do I Qualify For Long-Term Care Insurance?

There may be differences in answers to this question based on where the insured person resides. However, a licensed health care practitioner must provide a plan of care or certify that the policyholder in the United States needs at least two of the following tasks. Many states have “benefit triggers.”

What are benefit triggers?

Benefit triggers are the factors that an insurance provider will use to decide whether you are eligible for benefits. A nurse and social worker will often work together to complete an organization’s standard evaluation form.

Benefit triggers:

• Are what insurance companies look at to see whether they should pay for your treatment in the long run.
• Are based on an evaluation performed by a nurse or social worker paid for by the firm.
• Cognitive impairments and/or difficulties with ADLs (activities of daily living) serve as common defining characteristics.
• When you need substantial assistance with two (chronically ill) or more of the five ADLs listed in your policy, or if you have a cognitive impairment, you should be eligible for long-term care insurance benefits.

What are the Activities of Daily Living?

As the name implies, personal care, or assistance with ADLs (activities of daily living), is the most common form of long-term care. Personal care services include the following:

• Assistance with Bathing: The capacity to enter and exit the restroom to clean oneself.
• Continence: The capacity to regulate one’s urine and bowel functions.
• Dressing: This is the capacity to dress oneself alone.
• Eating: This is the capacity to provide for oneself.
• Toileting: This is the capacity to mount and dismount the toilet.
• Transferring: This is the capacity to enter and exit a bed or chair.
• Debilitating conditions, such as Alzheimer’s disease, dementia, and schizophrenia, may also qualify policyholders for long-term care coverage.

In addition, most plans demand beneficiaries to pay out-of-pocket for care services during an elimination period (waiting period). The average time frame is between 30 to 90 days, after which the insurance company will begin making payments. Qualified long-term care insurance policies cover care costs up to a daily maximum until a lifetime maximum is reached.

Some health insurance companies provide a “shared care” option for married couples, which allows them to pool their coverage and continue receiving benefits after one partner has exhausted their own.

Eligibility

While some providers may advise buying the coverage as early as age 40, Consumer Reports suggests waiting until age 60. You may be hit with sky-high premiums if you put off purchasing LTC until the last minute.

Eligibility is often guaranteed for those who are 65 or older and have a serious medical condition. Each insurance provider, however, has its own set of rules for determining who qualifies for coverage.

To qualify, you may need to meet particular asset or income requirements, for instance, from certain businesses. Others may base their decisions on your family health history alone.

The insurance provider decides who gets approved for a long-term care insurance policy. 

What are health ratings?

A Standard health rating is assigned to most applicants for individual long-term care insurance policies. If a licensed health care practitioner gives you a clean bill of health, you may be eligible for discounted premiums. These discounted premiums are often called preferred health rates.

Underwriting involves establishing your health rating, on which a qualified long-term care insurance agent will base your premium. Some insurance companies provide substandard or high-risk rate classes depending on a patient’s diagnosis or medical treatment. You may be given insurance, but it would cost a lot more each month.

Disqualifications for long-term care insurance

Insurance companies consider the policyholder’s age and health status when determining the premium for long-term care insurance. Insurance costs increase annually if you don’t sign up immediately. Once you’re covered, your rates are locked in at the age you purchase and do not rise each year just because you age.

A health screening procedure must also be authorized. Some medical conditions may prevent you from getting insurance, like preexisting conditions. To avoid becoming uninsurable after an unexpected illness or accident, apply for coverage sooner rather than later.

Ineligibility for insurance based on common conditions & reasons

The following are some of the main reasons why the majority of people may not be able to get long-term care insurance:

• A serious illness requiring ongoing medical care, such as a terminal illness like cancer, heart disease, or mental illness, will certainly exclude you from purchasing long-term care insurance.
• If you have a record of substance misuse, you will not be eligible for coverage. 
• A conviction history (criminal record) might prevent you from qualifying for long-term care insurance. 
• You won’t be able to get long-term care insurance if you’re already considered elderly (typically, anyone 85 and up).

Top Causes of decline

• Dialysis, nebulizer, ventilator, hospital bed, oxygen, and the use of a walker, wheelchair, quad cane, or motorized scooter.
• Nausea and vomiting caused by current opioid pain medication usage.
• Currently in Physiotherapy.
• Possessing a disability and thereby receiving benefits.

When is the right time to get long-term care insurance?

When you’re in your 50s or 60s and still in excellent health, investing in long-term care insurance is a good time. It would be best if you thought about your age and health first.

Age

Premiums for various plans vary according to the age of the policyholder. Age is a significant factor in determining your insurance premium, and the high cost of coverage may make a plan unaffordable if you put off buying it for too long. And if you wait until you’re above a particular age to attempt to get a policy, generally in the mid-70s, the insurance provider is likely to reject you.

Medical Conditions

Your health must meet specific requirements before long-term care insurance companies can accept your application. So, expect to be asked a lot of personal health questions. You will likely also need to undergo a physical examination.

Because of the considerable risk involved, insurance companies will only provide long-term care policies to generally healthy individuals. It’s important to note that it is not a given that you will be accepted for a qualifying long-term care insurance policy. Approximately a dozen insurance providers in the United States provide long-term care insurance, and all of them consistently reject applicants due to their health conditions.

What does a long-term care plan cover?

In most cases, long-term care insurance will cover your medical expenses for various services, whether in the comfort of your own home or a specialized facility. The specifics of what’s covered by insurance might vary, but it often covers things like:

Your house

Skilled nursing care provided in the comfort of one’s own home; rehabilitation services such as occupational, speech, and physical therapy; assistance with activities of daily living such as eating and bathing Coverage for housekeeper services, such as cooking and cleaning, may be included in specific plans.

Respite Care

The types of services and care provided temporarily at a home, adult day care facility, or nursing home; often known as “respite care.” It’s designed to free up a main caregiver.

Nursing homes

Custodial care is what most nursing homes provide, and daily activity supervision is included in this category of care. Nursing home care provide a greater degree of care than assisted living households.

Accommodations include either a communal or private room, three meals a day, and round-the-clock access to medical care and monitoring. The levels of care include providing rehabilitation treatments (occupational, physical, and speech) and social and recreational activities, and competent nursing care and other medical attention.

Care received in a nursing home for a shorter period of time, such as to aid in recovery after a stroke or an accident, is not included in the definition of long-term care.

Residential care facility

Those in greater need of medical attention and assistance can find it around the clock at a skilled care facility. Rehabilitative treatments, such as physical therapy, occupational therapy, and speech therapy, are often provided in skilled nursing facilities to aid patients in their recovery after sickness, accident, or surgery.

Assisted living facilities

With this kind of qualified long-term care service, you can access your home and get hands-on assistance with daily living activities as required. In addition to the three daily meals, two snacks, and various other services, residents also have access to scheduled transportation, social activities, assistance with cleaning, and more.

Alzheimer’s special care facilities

There is often a dedicated area for individuals who need memory care in any facility that provides long-term care or assisted living. These facility sections are designed for those in need of memory care and are staffed by qualified professionals; they also often have additional safety measures in place.

The costs associated with long-term care insurance

Long-term care insurance rates are affected by different variables, similar to other insurance kinds. There are several, but some of them are:

• Age: Those who get insurance at a younger age may lock in reduced rates but will have to pay for them for longer.
• State of health: Insurance rates go up, or worse, coverage is refused if you wait to be covered until you have a health concern. Due to longer life expectancies, women often pay a higher premium than men for the same coverage level.
• Marital status: Insurance rates for married couples are often cheaper for an individual policy. Also, they may choose to buy into a system of shared advantages.
• Level of protection: Insurance premiums may rise if coverage is increased in other ways, such as by increasing the daily or lifetime limitations, using other features like inflation protection, or reducing the elimination period.
• Long-term care insurers: Prices for insurance policies might vary widely across companies and policies sold as tax-qualified must be in line with federal standards.

FAQs

What are the three types of long-term care insurance?

Long-term care insurance comes in three primary forms: original, hybrid, and lifetime coverage insurance, with an, added long-term care rider. You should carefully weigh the benefits and drawbacks of each coverage option. The bottom line is finding a policy to cover your long-term care expenses.

What are exclusions in long-term care insurance?

Policies that provide coverage for long-term care services often include the following exclusions:

• The insurance may exclude or restrict payments for mental illness, but NOT for Alzheimer’s disease, senile dementia, or any other organic brain disease that can be proven.
• Deliberate self-inflicted harm.
• Drug and alcohol dependence.

What type of care is typically not covered in a long-term care policy?

The care given by loved ones is often not covered by long-term care insurance. Medical expenses are typically not covered either; such are the purview of private insurance companies and/or Medicare.

Final Thoughts

Long-term care insurance is highly recommended. The ever-increasing long-term cost of care are beyond the means of the vast majority of Americans. Otherwise, they’ll have to use their emergency fund or withdraw money from their retirement account. Policy Solver is a long-term care insurance specialist that work with you to find the best options based on your needs and budget.