What Does LTC Insurance Cover?

What is Long Term Care Insurance all About?

LTC insurance is a tool for retirement planning. In the event that an individual needs Long Term Care services, LTC coverage pays for this, whether the care is received at home, at an Assisted Living Facility, or in a nursing home. Due to normative old age, illness or due to accidents, a person will need assistance with ADLs (Activities of Daily Living) like bathing, toileting any many others. You can get LTCI from leading companies such as John Hancock, Genworth Financial, Mutual of Omaha and Transamerica.

Contrary to common misconception, LTC isn’t a preserve for the elderly. Unexpected illnesses and accidents can occur any time, age notwithstanding. Many people do ignore the fact that 40% of people who are currently receiving LTC are aged below 65 years. That’s why it makes sense to subscribe for this form of insurance right form an early age, during which time you have to pay lower premiums.

To learn more about LTC cover just in case you need it someday, you would need to be able to answer the following questions:

  • Where do you get this care?
  • How do you pay for the care?
  • Who would provide your care?

It’s important to understand what Long Term Care Insurance is, and what it covers. After you purchase a policy from a company of choice, you’re usually given 30 days (by law) to study the policy and make sure you agree with its terms and benefits. Given that you move forward with the policy, your Long Term Care Insurance covers the following:

Below is what LTC Insurance Covers

  1. Nursing home services: Long-term care insurance covers your care in an authorized nursing facility.
  2. Adult daycare services: Most insurance care insurance policies covers for the care received in an authorized adult day-care facility. It also provides care day care for those people who don’t need the intense assistance provided at a nursing home. Adult daycares usually entail educational and social activities, as well as personal supervision to care for patients who are suffering from Cognitive Impairment.
  3. Assisted living center services: Long-term care insurance policy covers for the care in an assisted living center. The care facility should be limited, and you get a payout that’s 100 percent of your specified daily/monthly maximum. However, if you’re part of a group LTC plan, you may only get 50-75%.
  4. Home health care services: This includes skilled care or custodial care in your home by a licensed home health agency or informal caregivers. The care coverage may include part –time skilled nursing care and assistance with activities of daily living.

Other Options/Benefits Covered by LTC Insurance Policies

  • Return of premium: in the case a policy holder doesn’t consume their LTC cover, their estate gets it all back after the policy holder’s death.
  • Respite care: This care service provided so that the primary caregiver can get time off to relax their minds.
  • Bed reservation: If you leave a care facility for a short while, the insurance firm reserves and pays for your bed.
  • Recovery period service: This is the care offered following stays at hospitals or other care facilities.
  • Home assistance service: This care helps with tasks such as cooking, shopping, and light housekeeping.
  • Caregiver training: This care is given when you have a specific individual whom you want care for you but needs education. Mostly, members of the family are usually trained.

Who foots your Long Term Care Bills?

Mistakenly, many people do believe that Medicare or their regular health insurance pays for their LTC. This isn’t  what happens though. Health insurance policies are designed to cover your medical expenses including tests, doctor visits, surgery, medicine, etc. There’s no health insurance company that will pay for the extra costs of Long Term Care.

Government plans (e.g. Medicare) have a 21-day nursing home care restriction. Specifically, Medicare only helps over 65 year olds and just takes care of 4% of your annual LTC costs. Medicaid, on the other hand, takes care of about 45% of your total expenditure on LTC. That means your family have to foot the remaining expense. And here’s the catch – before you even qualify to get Medicaid’s limited help, you have to be practically broke.

When to apply for LTC insurance?

For you to enjoy all the benefits that come with LTC Insurance you should apply for it while you’re young and quite healthy. This is because there is a possibility of being denied coverage due to poor health and age variation.

LTC Insurance protects your assets, and gives you the peace of mind that your family will get quality care if at all they need Long Term Care. Take a look at our Long Term Care basics for some more guidance on this important form of insurance.