Insurance
What is Long-Term Care Insurance?
Long-term care insurance covers the cost of assistance with daily activities like bathing, dressing, and eating—either at home or in a facility. This care can be provided in nursing homes, assisted living facilities, or in the policyholder's home. These services are typically not covered by Medicare or standard health insurance policies.
Long-term care premiums are determined by the age of the applicant, health status, and coverage options (such as maximum daily benefits and benefit periods). Buying policies earlier in life locks in lower premiums, serving as a critical tool for protecting retirement assets from catastrophic nursing care costs.
Quick Facts
PRACTICAL EXAMPLE
An individual in their late 70s requires daily assistance with dressing and eating. They move to an assisted living facility costing $5,000 monthly. Because they purchased a long-term care policy in their 50s, the insurer pays $150 daily ($4,500 monthly) directly toward their care costs.
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