Facts about Long-Term Care Insurance

iStock_000007392168XSmallAs more Americans are living longer, many boomers are facing the challenge of caring for their parents as they think about their own plans for the future. As part of planning for the future, many financial planners recommend that individuals consider what role, if any, long-term care insurance should play in their financial plan. Although sales of this insurance product have grown tremendously in the last decade, individuals need to carefully study the options available and the suitability for their own situations.

Long-term care is typically defined as assistance with the activities of daily living. Long-term care may be provided in a nursing home, assisted living facility or in your home. Many communities have a range of services available to help with long-term care needs including visiting nurses, home health aides, friendly visitor programs, home-delivered meals, chore services, adult daycare centers, and respite services for caregivers.

Long-term care insurance is designed to help pay for these services. Note that no long-term care policy will pay all long-term care expenses.

These resources provide a place to start learning the basics about long-term care insurance and the questions to ask.

Planning for Long-Term Health Care (pdf file) from the National Financial Planning Support Center provides an overview of the questions and issues, of which long-term care insurance may be one, that individuals should consider.

Long Term Care Insurance Fact Sheet (pdf file) is a one-page overview from the National Association of Insurance Commissioners. Use it for a very quick definition.

A Shopper's Guide to Long-Term Care Insurance (pdf file) is also from the NAIC. It is a very detailed look at long-term care insurance and includes worksheets.

Guide to Long-Term Care Insurance (pdf file) prepared by America's Health Insurance Plans. This 13-page booklet provides an overview of long-term care insurance, defines the types of insurance available and types of coverage, and provides a checklist to help you compare policies.

Consumer Reports has articles on Long-Term-Care insurance and getting long-term care from whole life insurance.

Most state governments, usually the health/human services or insurance departments, provide information on long-term care insurance (and state regulations if any). Wisconsin has set minimum standards for each of the types of policies covering long-term care expenses.  The Wisconsin Office of the Commissioner of Insurance provides a Guide to Long-Term Care with information about these requirements and other facts on LTC insurance. Also available is the publication, Companies Offering Long-Term Care Insurance Policies or Riders in Wisconsin.  For other states, we suggest entering the name of your state and "long-term care insurance guide" into your favorite search engine; then look among the listings for your state office.

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