LTCI is one of the fastest growing insurance policies today. Studies show that 60% of Americans over 65 will need some type of long-term services before they die. Most policies will pay for some home health care, assisted living and nursing homes. These policies can vary widely and it is a great idea to have another set of trusting eyes look at any policy before signing. The other big caveat is that if you can’t afford it then don’t do it, Medicaid will end up paying for nursing home care but it will limit your options.

Key points of a LTCI Policy:

1. The younger you start the smaller the premium
2. Policies differ in the amount they pay per day and there are “calculators” that try and predict what this care will cost in the future.
3. Policies usually have a total $ limit or a total days limit or both.
4. Some policies will have “elimination periods” which means that the policy does not kick in for a set period (usually 30 to 90 days).
5. Policies can also cover more services than others (home care is a good example).
6. The policy premium will also be dependent on a thorough physical and/or a medical review. The more chronic issues that you have, the higher the premium and some people will have a tough time getting one. The insurance companies would prefer to insure healthier people in general.
7. Most policies pay out in pre-tax dollars and have tax advantages when buying.

Action Step: Two great ways to get lower rates for LTCI is one to buy at an earlier age and the second is to have an “elimination period” which is the amount of time before the payments begin (60 days after diagnosis of patient is made). 

Golden Nugget: To Buy or Not – I have probably read a good 75 plus books on seniors and perused dozens more and it is rather universal, if you can find a way “buy long term care insurance”. Medicaid can and will take over but this insurance gives an individual options on both how and where they will live. Most nursing homes limit the # of Medicaid beds they accept payments from. Most LTCI policies will also pay Assisted Living and some Home care.