How Much Do You Know About Long-Term Care Insurance?

Long-term-care (LTC) insurance covers a variety of services to help chronically ill or disabled people manage the activities of daily living (bathing, dressing, preparing meals) in their home or in a skilled-nursing facility. Even though these seem like the types of services that would be covered under a health care plan or Medicare, that’s not always the case; most medical plans, including Medicare, only cover medically necessary services. To help ensure that your long-term savings won’t be depleted by long-term-care expenses, consider purchasing LTC insurance.

According to the U.S. Department of Health and Human Services, 70% of people age 65 and older will need LTC at some point during their lifetime. Surprisingly, seniors aren’t alone in needing LTC: The American Association for Long-Term Care Insurance (AALTCI), an industry trade group, reports that 37% of current LTC recipients are under age 64.

The AALTCI reports that approximately 57% of the people who applied for LTC insurance in 2011 were between the ages of 55 and 64. Even so, the younger and healthier you are when you apply for coverage, the more likely you are to meet insurers’ requirements, and the less your coverage will cost over the course of your lifetime.

Monthly premiums for LTC insurance vary widely. There are a number of variables that affect the cost of coverage, including your age and health status at the time you apply, the length of time the policy pays benefits, and the amount that the policy pays for various services.