Heard about long-term care insurance? Wondering if it's a good idea?

We asked the federal government to provide us with some answers to your questions.

We know: How Long-Term Care Insurance Works

What is long-term care?

Long-term care generally includes all the assistance you need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time. You can receive long-term care in a nursing home, or in your own home. Though older people use the most long-term care services, a young or middle-aged person who has been in an accident or suffered a debilitating illness can also need long-term care.

What is likelihood a person will need long-term care?

It's estimated that by the year 2020, 12 million older Americans will need long-term care. Most will be cared for at home; family members and friends are the sole caregivers for 70 percent of elderly people. A study by the U.S. Department of Health and Human Services indicates that people age 65 face at least a 40 percent lifetime risk of entering a nursing home. About 10 percent will stay there five years or longer.

Will my current health insurance cover long-term care?

Generally, long-term care isn't covered by the health insurance you may have either on your own or through your employer. It also is generally not covered by Medicare or Medicaid. However, some life insurance policies offer long-term care benefits.

How does long-term care insurance work?

There are several kinds of long-term policies, but there are no policies that guarantee to cover all expenses fully.

  • An indemnity or "per diem" policy pays up to a fixed benefit amount regardless of what you spend.
  • An expense-incurred policy lets you choose the benefit amount when you buy the policy and you are reimbursed for actual expenses for services received up to a fixed dollar amount per day, week, or month.
  • Integrated policies or policies with pooled benefitsprovide a total dollar amount that may be used for different types of long-term care services. There is usually a daily, weekly, or monthly dollar limit for your covered long-term care expenses.

What's generally covered by a long-term care policy?

Policies usually cover skilled, intermediate, and custodial care in state-licensed nursing homes. They also cover home care services such as skilled or non-skilled nursing care, physical therapy, homemakers, and home health aides provided by state-licensed and/or Medicare-certified home health agencies.

Many policies also cover assisted living, adult daycare, and other care in the community, alternate care, and respite care for the caregiver.

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