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Does Insurance Cover Long-Term Care?

Individuals purchase Long-Term Care, or LTC, insurance to pay for services needed to take care of insureds over a period of time. These services can be used by insureds in their homes, or at adult daycare centers and other facilities. LTC plans have several features and options that can be added or modified to provide the best coverage for the insureds.

  1. LTC Policy Plan Options

    • There are several options available to LTC policy owners to control how benefits are paid out and for how long. Individuals can opt for plans that pay benefits for as long as the insureds need long-term care services or for set periods of time. Benefits can be distributed to cover daily or monthly services to allow for flexibility. Insureds can choose not to pay for services when family members are around. LTC plans have features such as Inflation Protection, which protects the buying power of the benefits; as the costs for services rise, the coverage amounts increase as well.

    LTC Plan Benefits

    • LTC policy benefits kick in once insureds need help with some of the Activities of Daily Living, called ADL, depending on the plan type. Tax-qualified plans that allow premiums to be tax deductible similar to health insurance premiums require insureds to need assistance with at least two ADLs. Non-qualified plans may require help with at least three. The six ADLs include bathing, toileting, transferring, dressing, continence and eating.

    Considerations

    • There are several services that are paid for by LTC policies that help insureds with their daily activities. LTC policies cover skilled nursing care, personal care, rehabilitation, speech and occupational therapy. Also covered by LTC plans are respite and hospice care and services provided in adult daycare centers, nursing homes and assisted living facilities. Transportation expenses, equipment purchases, home modifications and training costs are covered as well.

    Types

    • Individuals can purchase LTC plans that provide either comprehensive or "facility use only" coverage. Comprehensive coverage pays for care and services in the insureds' homes or in facilities. Facility use only coverage, which is the cheaper plan of the two, pays for care only in settings such as nursing homes and assisted living facilities.

    Exclusions

    • Individuals who have certain medical conditions, such as Parkinson's disease, Alzheimer's disease, AIDS and multiple sclerosis are excluded from LTC coverage. LTC plans also do not cover those who have had strokes within the last 12 to 24 months, have histories of strokes, or people who are already receiving assistance with ADLs. Some other exclusions include care and services for alcoholism, injuries resulting from suicide attempts, self-infliction or war. Care received in government facilities outside the United States, or from family members who are not employees of companies providing treatments or services, are also not covered under LTC policies.

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