Long Term Care Insurance

Every year, hundreds of thousands of Americans require some form of long term care due to a medical condition. In fact, over 50% of us will require long term care at some point in our lives. Long term care can make all the difference in improving a patient's quality of life but can also be a huge financial burden to them and their families. Long term care insurance is a tool that can be used to ease that burden.

What is Long Term Care?

Long Term Care is a general term for any type of care, both medical and non-medical required by individuals suffering from illness or disability. Help with meal preparation, bathing, and dressing are types of non-medical long term care whereas dressing of wounds, administration of medications, etc. are examples medical long term care activities.

The term is somewhat misleading because "long term care" may only be required for a few weeks. For example, a patient who breaks their leg may need "long term care" for only a short period of time, just until they get back on their own two feet again.

What Types of Long Term Care Insurance Policies Are There?

Their are two main types of long term care policies:

1. tax qualified--the benefits from this type of policy are not taxable and the premiums are tax deductible. However, the benefits on this type of policy are heavily regulated and difficult to qualify for. In order to qualify for benefits, the patient to be fairly disabled (i.e. unable to eat, bathe and dress themselves), be expected to need care for at least 90 days and have a detailed plan of care written for them by their doctor.
    
2. non-tax qualified-- the benefits from this type of policy are taxable and are relatively simple to qualify for. The insured patient can collect benefits for almost any medical reason, as long as their doctor states that they need care and the insurance company agrees that their claim is legitimate and reasonable. This type of policy is becoming less commonly available.

Both types of policies may be purchased as individual policies or through group policies. Be cautious when purchasing your policy, especially through a group policy: make sure that it is renewable and that the premiums can't be adjusted at the insurer's whim.

Who Is Eligible For Long Term Care Insurance?

Generally, middle-aged individuals who are in good health and who don't currently require long term care will be eligible for long term care insurance. People who are in their 70's, 80's or 90's or who are currently ill or disabled will not be eligible for most long term care insurance policies and, if they are able to get any long term care insurance at all, the premiums will be very expensive.

Who Should Consider Long Term Care Insurance and When Should They Buy Their Policy?

Unfortunately, many people only consider buying long term care insurance once they become ill or disabled. By then it's too late to get good, affordable coverage. Both young and old people should consider buying a policy. Depending on the current state of their health and their likelihood of becoming ill or disabled, people in their 20's, 30's and 40's may decide that buying a long term care insurance is a good investment for them. Individuals in their 50's and 60's should strongly consider buying a long term care insurance policy before any age-related conditions strike them. The younger someone is when they buy their policy, the lower their premiums will be.

Keep in mind that benefits usually can't be collected from your policy immediately. Most policies have a waiting period of between 20 days and one year before the insured party can collect benefits. Generally, policies with long waiting periods have lower premiums than policies with short waiting periods.

~ Tammy Biondi, Staff Editor

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