Who Qualifies for Long-Term-Care Insurance?

Long-term-care (LTC) insurance is insurance intended to cover care and services necessary when the insured becomes unable to carry out basic daily living activities such as dressing, eating or preparing food, going to the bathroom or daily grooming and bathing. Long-term-care insurance plans is available only to individuals whose health meets the insurance companies' standards at the time the insurance is purchased. There are different types of LTC plans available with benefit periods that can last for a couple of years or for the rest of the insured individuals' lives.

What Is Long-Term-Care Insurance?

• LTC insurance policies pay for several care and services that aren't covered by regular health insurance policies. These coverages are bought individually or obtained through group plans sponsored by employers. There are two main types of LTC policies: tax-qualified and non-qualified. Both plans pay tax-free benefits, but tax-qualified policies allow policy owners to deduct their premium payments while non-qualified coverages don't. However, non-qualified plan benefits are triggered without the insured individual needing help with any activities of daily living (ADLs), while tax-qualified plans require insured individuals to need assistance with two or more ADLs. There are seven types of ADLs: bathing, eating, transferring (moving from one place to another, such as from bed to chair or from chair to bathroom), walking, going to the bathroom, dressing and continence.

Who Is Covered

• Long-term-care insurance plans cover individuals who are not considered high risks by insurers due to poor health. People who generally won't be able to get long-term-care insurance include individuals who are already needing or using long-term-care services or who already need help with ADLs or who have histories of strokes. People with multiple sclerosis, Parkinson's or Alzheimer's disease, AIDS or metastatic cancer are not covered by LTC policies.

What Is Covered

• There are different types of services covered under LTC plans. Some include skilled nursing care; homemaker services; occupational, speech, rehabilitation and physical therapy; hospice care; and respite care. Services and care provided in adult day-care centers, nursing homes and assisted living facilities as well as transportation and equipment expenses are covered.

Exclusions

• LTC plans has several exclusions. LTC plans do not cover care or services related to alcoholism, illegal drug addictions or injuries resulting from war or injuries that were self-inflicted or intentional. Care and services provided by family members, and care outside the United States, in government facilities or covered by Medicare are also not paid for by LTC insurance coverages.