Paying for care
Long-term care insurance
Long-term care insurance is a private policy that pays for help with daily living when a person can no longer manage alone. Policies typically pay a daily amount up to a chosen limit. They can cover care at home, adult day care, assisted living, and nursing homes, depending on the policy.
Why it matters for your family
Most policies begin to pay when a person needs help with two or more activities of daily living, or has a cognitive impairment such as dementia. Policies set a daily limit, a benefit period, and an elimination period, which is a waiting time before payments begin. A family should find the policy early and read it closely. A common mistake is to assume the policy pays automatically. The insured usually must file a claim and show proof of need. Call the insurer, ask what care settings it covers, and ask whether it requires a licensed provider.
Source: acl.gov
Read more: 5 Myths about Long-Term Care
Related terms
- Elimination periodAn elimination period is the waiting time in a long-term care insurance policy before benefits begin.
- Hybrid long-term care policyA hybrid long-term care policy combines life insurance or an annuity with long-term care benefits.
- Activities of daily living (ADLs)Activities of daily living (ADLs) are the basic self-care tasks people do each day.
- Life insurance with long-term care riderA life insurance policy with a long-term care rider lets the owner use part of the death benefit while alive to pay for qualified care.
- Medicare coverage of custodial careCustodial care is non-skilled personal care, such as help with bathing, dressing, eating, and using the bathroom.
- Private payPrivate pay means a family pays for care directly from its own money.
