Wills and Estate Planning

Understanding Long-Term Care Insurance

Assisted living. Retirement homes. Home health care. These are all topics we're not too fond of discussing. But planning now with long-term care insurance may be something to consider.

What Is Long-Term Care and Should I Consider Long-Term Care Insurance?

Long-term care is what you'll need if you are unable to perform your normal daily activities on your own - such as eating, bathing, and dressing. If this happens, you may need additional help for an extended period of time, or even for the remainder of your life.

In fact, more than twelve million people in the United States, about half over and half under age sixty-five, will need some kind of long-term care during their lifetime.1 And although it's typically associated with health care for the elderly, many times younger, working-age adults require long-term care due to a chronic illness or injury.

Whether it's provided in your home, at an assisted living or nursing facility, long-term care is typically very expensive and isn't covered by health or disability insurance, or even Medicare. So while your health insurance plan may cover nursing home expenses, it's generally only for a short time, such as when you are recovering from an illness or injury. With disability income insurance, you may receive compensation for a portion of your income (if you are unable to work), but not for long-term care. Medicare provides a very limited coverage for skilled nursing care following a hospitalization, but after that, it's up to you.

Considerations for long-term care insurance

If you find yourself in any of the above situations, you might be wondering just who pays the medical bills. In this case, you have the option of paying for costs out-of-pocket, using Medicaid, or long-term care insurance. However, Medicaid provides a very limited option for most people because not everyone qualifies, and not every health care facility will accept Medicaid coverage.

For these reasons, long-term care insurance can be a good option, especially if you have assets and income you want to protect, you don't want to be a financial burden to those you love, and you want a choice in the type of care that you receive.

Being financially ready for the possibility that at some point you will require long-term care is an important part of retirement planning. In fact, statistics show 70 percent of people who reach 65 will need long-term care. And with long-term care costing as much as $250 a day, it doesn't take long to completely deplete a lifetime of savings-even if you're "lucky" enough to only need it for a relatively short period of time.

If you're considering long-term care insurance, consult with a qualified insurance agent who can help you decide if long-term care insurance is right for you. And remember, like most life and health related insurance policies, long-term care insurance is often more affordable the younger and healthier you are. So it's best not to delay.


1. http://longtermcare.gov/the-basics/who-needs-care/

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax‐related decisions. For information about Protective Life and its products and services, visit www.protective.com.

Long-Term Care Insurance

This articles highlights how why long-term care insurance is important. Protective Life explains why you should consider long-term care insurance. Wondering if you might need long-term care insurance? The fact is, many of us will. There are many considerations when deciding if long-term care is right for you.

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