Long-term care insurance is a kind of medical or health insurance you can buy that covers medical equipment, care or therapy for long-term conditions such as a stroke, dementia or cancer. It particularly covers care you might need at your own home, and not at a doctor's office, in the hospital or in a nursing facility. Most people consider buying it in addition to their health insurance in order to be able to receive medical care for a long period of time in their home, and to avoid having to go to a nursing home to receive such care. (What may be covered by this insurance is coming right up.)
In other words, this kind of insurance is very helpful in situations where you could be ill enough to need help at home or in recovering further, but could not otherwise afford it and are then left with no choice but a nursing home.
When to buy it is a judgement call. You want to already have it before you need it, so you don't want to wait overly long. At the same time, it's a very expensive insurance so buying it too early can be needlessly expensive. Having pre-existing medical conditions can make it more expensive, while buying it at 40 years old could even mean the insurance company is no longer financially solvent by the time you are old enough to need it! Look at your age, whether or not you smoke, your health and also your family medical history. Also consider your personal finances and the credit-worthiness of any insurance company you are considering.
If you are already on MediCare, examine some of the supplement plans which include long-term care coverage. You may find the coverage to be worth any increase in costs to you.
Read the fine print! Is skilled therapy (such as physical, occupational or speech therapy) covered? Is Durable Medical Equipment (DME such as hospital beds, wheel chairs, etc.) covered? When and for how long is coverage provided? Does it cover unskilled caregivers (someone to come in regularly to help you dress, have a bath, eat or just to be there to make sure you are okay)? How does it coordinate benefits with your other insurance(s)? Where does it provide coverage: hospitals, rehabilitation centers, your home?
Often, the need for coverage includes being unable to perform some of what are known as Activities of Daily Living (ADL's). There are six of them: bathing, toileting, dressing, feeding, continence and transferring (moving). You would like for coverage to start if you are unable to independently perform as few as 1-2 ADL's, especially transferring and continence. These two ADL's are the hardest for spouses, friends and family to manage for any length of time.
So, bottom line:
- Long-term care insurance can turn out to be extremely helpful to you should you be so unfortunate as to ever need it.
- It's usually very expensive.
- Comparison shop wisely with an eye to when you buy it, its affordability to you, the financial viability of the insurer, and whether it will help you as much as possible when you need it.
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