Long Term Health Care Insurance

Sixty percent of adults over the age of 65 will require long-term care at some point in their lives. Having a long-term care insurance policy does not ensure that all costs will be paid. Most insurance policies, including Medicare, cover only a fraction of the cost of skilled nursing homes, and do not cover most assisted living costs. Long-term care insurance does more to help pay for these expenses due to:

  • illness
  • accident
  • frailty
  • dementia

There are two types of long-term care insurance, tax-qualified and non-tax-qualified. Benefits received through a tax-qualified plan are not taxable. Benefits received through a non-tax-qualified plan might be taxed as income. With most non-tax-qualified plans, your Senior parent can start receiving benefits when a doctor decides that regular care is required.

Instead of paying for services directly, most long-term care plans allow Senior’s to select a daily or monthly benefit amount, ranging from $50-$500. Benefit payments support home health care services, assisted living, or residential skilled nursing.


Most long-term care plans:

  • have a lifetime maximum for benefits
  • cover specific situations, such as facility care
  • focus exclusively on services associated with chronic illness or disability

To start receiving benefits from a tax-qualified plan, your Senior parent must lose the ability to perform at least two activities of daily living without some form of assistance such as:

  • dressing
  • bathing
  • eating meals
  • toileting


Long Term Health Insurance is its own specialty in the world of Insurance. Look for a reputable firm. One that has been around for a long time. Check with the Better Business Bureau once you have identified one of interest to make sure their license is up to date and they are highly rated.


  • Remember, the older and sicker a person becomes, the more expensive it is to obtain long-term care insurance. Buying a long-term care policy early saves money.
  • Be ready to discuss your parent’s current health history and/or prognosis.
  • Be familiar with the current health care coverage.
  • Time frames for projecting the need for long term care coverage is important.
  • Know the monthly budget constraints for this type of insurance.
  • If Medicare is involved – know where they start and stop in coverage.
  • Understand the level of participation/commitment the family will agree to if long term care is required; assuming this is even an option.


  • Describe the various plans and what types of care will be covered in those plans.
  • What are the monthly fees? Ancillary fees?
  • When can the policy holder start to receive benefits?
  • Can the doctor recommend long term care at any time, or is there a list of specific criteria to be met in order to receive payment?
  • Do you pay for costs directly or make cash payments to policy holders? If you pay cash, what are your payout plans?
  • What is the lifetime maximum for each plan you offer?
  • Are your plans tax-qualified?
  • Does your coverage have any perks we might be interested in?

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