Long Term Care Insurance

Long term care insurance covers expenses and services not covered by health insurance, Medicare, or Medicaid. Speak with one of our specialists about your options today.

What is Long Term Care Insurance?

Long-term care insurance (LTC or LTCI), an insurance product that helps provide for the cost of long term care beyond a predetermined period. Long-term care insurance covers care generally not covered by health insurance, Medicare, or Medicaid.

Individuals who require long-term care are generally not sick in the traditional sense, but instead, are unable to perform the basic activities of daily living (ADLs) such as dressing, bathing, eating, toileting, continence, transferring (getting in and out of a bed or chair), and walking.

How Much Long Term Care Insurance Is Enough?

Not only are you dealing with the question of do you need long-term insurance (LTC), but how much coverage is right for you. Here are some guidelines to help you determine your needs.

​Determining the right amount of LTC for you

Assume you have $60,000 coming in from Social Security and investment income. That's about $164 a day.

Estimate hourly LTC costs in your area. For example, in Phoenix, in-home care runs about $22 an hour. If all of your income was available for care, that would provide about 7.5 hours a day of care – enough for someone to come in and help with major tasks each day.

However, not all your income is available because you still need money for living expenses in addition to your LTC costs. Plus, if you are married, your spouse may need a significant portion of that income to continue their own lifestyle.

You may decide that of the $164 you have available as income per day, only $40 of it would be available for LTC costs. That would cover less than two hours a day. For the sake of our example, assume that costs in your area run about $220 a day (about average); leaving you with a gap of $180 a day. If you decide to protect against an average stay of about 2 ½ years, then you would want to buy a policy that had a $180 per day benefit that would provide coverage for 2-4 years. You would also want an inflation rider, so if and when you needed care (likely 10-20 years after purchase of the policy) that $180 per day would have increased.
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In considering LTC insurance you will have the necessary resources to afford quality care, and you will have the ability to choose how and where you receive this care. It’s important to determine what financial resources will be available to you and role LTC can play in providing you with quality care.

The Benefits of Long Term Care Insurance

Long-term care insurance generally covers home care, assisted living, adult daycare, respite care, hospice care, nursing home and Alzheimer's facilities. If home care coverage is purchased, long-term care insurance can pay for home care, often from the first day it is needed. It will pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse up to seven days a week, 24 hours a day (up to the policy benefit maximum).

Other benefits of long-term care insurance:
  • Many individuals may feel uncomfortable relying on their children or family members for support, and find that long-term care insurance could help cover out-of-pocket expenses. Without long-term care insurance, the cost of providing these services may quickly deplete the savings of the individual and/or their family.
  • Premiums paid on a long-term care insurance product may be eligible for an income tax deduction. The amount of the deduction depends on the age of the covered person. Benefits paid from a long-term care contract are generally excluded from income.
  • Business deductions of premiums are determined by the type of business. Generally corporations paying premiums for an employee are 100% deductible if not included in employee's taxable income
Medicaid provides some of the benefits of long-term care insurance. A welfare program, Medicaid does provide medically necessary services for people with limited resources who need nursing home care but can stay at home with special community care services. However, Medicaid generally does not cover long-term care provided in a home setting or for assisted living. People who need long-term care often prefer care in the home or in a private room in an assisted living facility.

Contact us to learn more about the right long term care insurance for you.
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