In-home care services and nursing homes are costly and aren’t covered by Medicare.

Did you know that Medicare typically doesn’t cover nursing home stays or in-home health services? And did you know that nursing home stays can cost more than $100,000 per year in many parts of the U.S.? If you end up needing long-term care services, costs like these can drain your retirement savings quickly.

Long-term care, or LTC, insurance can help protect against these expenses if you or your spouse can no longer perform daily living activities such as bathing, dressing, and eating on your own. However, LTC insurance can be rather costly and isn’t right for everybody. Here’s a quick introduction to LTC insurance, what it covers and costs, and how you could keep your LTC insurance costs in line.

What is long-term care insurance?

Most health insurance covers things like hospital stays, medical procedures, doctors’ office visits, and prescription drugs. However, the cost of long-term services such as nursing home stays is generally not covered. Even Medicare will only cover short stays in nursing homes, or some in-home care, but only under specific conditions.

Long-term care insurance is designed to cover these types of expenses. In addition to nursing home stays, long-term care insurance can cover things like a home health aide to assist with bathing, dressing, or eating. Covered services vary by policy,

What does long-term care insurance cover?

I already mentioned nursing home stays as one of the common expenses covered by LTC insurance policies. In addition, LTC policies generally cover the following:

  • Care in your home, such as skilled nursing care, occupational and physical therapy, and help with personal care.
  • Alzheimer’s care facilities
  • Assisted living facilities
  • Hospice and respite care services
  • Adult day care centers
  • Home modification — some policies cover things such as wheelchair ramps and grab bars to make your home more accessible

Long-term care policies generally start paying benefits after you’ve waited through your policy’s elimination period (more on that in a bit) and have met the “benefit trigger.” This is typically defined in terms of Activities of Daily Living (ADLs) and most policies start paying once you need help with two or more of these, which include things like bathing, dressing, and eating.


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