Long-Term Care Insurance Basics

People are living longer but many will struggle to take care of themselves as they age.  When people are diagnosed with a chronic illness and are unable to perform activities of daily living – such as eating, dressing and bathing – they may require the services of nursing homes, assisted-living facilities and in-home caregivers. Because the cost of these services can become prohibitively high, interest in long-term care insurance is increasing.

A major consideration for purchasing long-term care insurance is whether individuals have assets they want to protect. Standard health insurance policies and Medicare usually do not pay for long-term care expenses associated with chronic illnesses such as Alzheimer’s disease, Parkinson’s disease, multiple sclerosis and diabetes. The substantial annual cost of long-term care can therefore quickly deplete even a sizeable nest egg. If, however, one’s retirement savings are minimal or non-existent, he or she would likely qualify for Medicaid in a very short period of time, significantly diminishing the need for long-term care insurance coverage. According to the National Association of Insurance Commissioners (NAIC), consumers should not purchase long-term care insurance if they are currently on Medicaid or their only source of income is Social Security.

We encourage consumers to learn more about long-term care insurance by exploring the NAIC’s online resources on Long-Term Care Insurance . You can also download a copy of the NAIC’s “A Shopper’s Guide to Long-Term Care Insurance”.