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Long-Term Care Insurance: What It Really Covers

Photo: Joanna Orpia

Long-term care insurance is a very popular way to prepare for expenses in the event you or your loved ones are unable to take care of yourselves for an extended period of time.

Unlike regular health insurance, long-term care insurance is designed to reimburse the policy holder for a set amount per day for a maximum time period determined by the policy. The policy will help pay for a variety of services in several different settings.

Even if you feel you are a completely healthy person, bear in mind that the average person requires three years of long-term care during their lifetime. Many people believe long-term care insurance is only for those who end up in nursing homes, but the reality is there is a lot of degrees of care the insurance will cover.

So, the benefits of long-term care insurance and how the benefits are paid might mean more to you than you think.

When long-term benefits begin
In order to receive long-term care benefits, two criteria must be met. You have to have a "trigger" and a certain amount of time has to pass after the trigger is identified.

A Benefit Trigger is the criteria the insurance company uses to determine if you need long-term care. This is usually definied by needing help with a certain number of Activities of Daily Living (ADLs).

Once the trigger occurs, a pre-determined amount of time must pass before benefits will begin, known as the "elimination period". In other words, this is the period of time that makes the need for care a "long-term" need.

For those who may be unfamiliar with long-term care insurance and what it covers, here is an overview of what the daily benefit amount can be applied toward. Maybe getting coverage now could be the right move for you.

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Read/Post Comments (3) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 14, 2014, at 12:54 PM, LTCConsumer wrote:

    Great article. With our older generations living longer, this form of insurance is only going to get more popular.

  • Report this Comment On July 14, 2014, at 2:10 PM, BarbaraLTC wrote:

    I have personally helped hundreds of my LTC policyholders access their LTC insurance benefits. Virtually all stay at home, as their policies can help immediately with equipment, home modification and care such as help bathing, dressing, food prep and daily activities. Post HIPAA policies (1997+) require a 3 month certification of need, but if their doctor expects care to last that long, even temporary conditions can be covered. Depending on the policy benefits, many folks can receive care immediately. With assisted living and hospice coverage, virtually none have required a nursing home so far.

  • Report this Comment On July 22, 2014, at 2:57 AM, Nicole1017 wrote:

    Long-term care insurance is actually a great product, however, people do not realize its significance unless the need for care comes quickly than they expected. Too often, people seek long-term care insurance once they need them, which is already too late.

    You don't have to be ill to need long-term care services, once you are frail to perform the activities of daily living, you already need personal or custodial care and this is when long-term care comes in.

    If you think that you might not be able to pay for ltci, you can shop from different long-term care insurance companies so you can compare prices, as stated in long-term care insurance quotes varies widely so it would help to shop early and not to wait too long. It would be more convenient as you will be able to choose the best policy that fits your needs and preference. So when the need for care arises, you get the quality care you want.

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Matthew Frankel

Matt brought his love of teaching and investing to the Fool in order to help people invest better, after several years as a math teacher. Matt specializes in writing about the best opportunities in bank stocks, real estate, and personal finance, but loves any investment at the right price. Follow me on Twitter to keep up with all of the best financial coverage!

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