Long-term care insurance pays for services when you need help taking care of yourself because of a chronic medical condition, disability, or disorder such as Alzheimer’s disease.
A policy can help pay for assistance with routine activities, such as bathing or dressing. Most policies will reimburse for care given in a variety of places, such as at home, in a nursing home, assisted living facility, or adult day-care center.
Whybuy long-term care insurance:
Chances are you’ll need long-term care at some point in your life. Among 65-year-olds, 70% will use some form of long-term care, according to the U.S. Department of Health and Human Services.
Regular health insurance doesn’t cover long-term care. And don’t think that Medicare will come to the rescue; it covers only short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and help with day-to-day tasks.
If you don’t have insurance to cover long-term care, you’ll have to pay for it yourself. You can get help through Medicaid, the federal and state health insurance program for low-income people, but only after you’ve exhausted most of your savings.
People buy long-term care insurance for two reasons:
1. To protect their savings. Long-term care costs can deplete a retirement nest egg quickly. The median cost of care in a semiprivate nursing home room now tops $80,000 a year, according to Genworth’s 2015 Cost of Care Survey.
2. To give more choices for care. The more money you can spend, the better quality of care you can get. If you have to rely on Medicaid, your choices will be limited to the nursing homes that accept payments from the government program. Medicaid does not pay for assisted living in many states.