Long-term care insurance (LTCI) is a type of insurance designed to help cover the costs associated with long-term care services. Long-term care services include assistance with activities of daily living (ADLs) such as bathing, dressing, eating, toileting, transferring, and continence. It also encompasses care provided in nursing homes, assisted living facilities, adult day care centers, and at home by professional caregivers. LTCI policies usually provide a daily or monthly benefit amount that can be used to pay for long-term care services. The benefit period can vary, ranging from a few years to a lifetime. Policyholders can choose the benefit amount and benefit period based on their individual needs. To qualify for long-term care insurance, applicants typically undergo medical underwriting, which involves answering health-related questions and may require a medical examination. Insurers assess the applicant’s health and may offer coverage at standard rates, higher rates, or decline coverage based on the individual’s health status. LTCI premiums can vary based on factors such as age, health status, benefit amount, benefit period, and optional riders. Policyholders can choose to pay premiums on an annual, semi-annual, quarterly, or monthly basis. Some policies offer premium guarantees, while others may increase premiums over time. Long-term care insurance policies may include optional riders or features that enhance coverage or provide additional benefits. Common riders include inflation protection, which increases the benefit amount over time to keep pace with rising long-term care costs, and shared care, which allows spouses or partners to share benefits. Long-term care insurance premiums may be tax-deductible, subject to certain limitations based on the policyholder’s age and adjusted gross income. Benefits received from LTCI policies are generally tax-free, providing tax-efficient funding for long-term care expenses.

Long-term care insurance can help individuals and families protect their assets and maintain financial security in the event of a need for long-term care services. However, it’s essential to carefully review policy terms, coverage options, and costs to ensure that the policy meets your long-term care needs and financial objectives. Consulting with a financial advisor or insurance specialist can help you navigate the complexities of long-term care insurance to make informed decisions.