How does long-term care insurance work?

Are you considering applying for long-term care insurance? Do you or your loved one already have insurance but want a quick refresher on the basics? Here we answer the questions most families ask us about long-term care insurance and how it works.

What is long-term care insurance?

Long-term care insurance helps pay for the cost of care you might need to do basic daily activities (bathing, dressing, going to the bathroom, etc.) not generally covered by health insurance, Medicare, or Medicaid. Age is not a factor in determining if you need long-term care. Many people need help after a serious accident or the progression of a disease.

How do I apply for long-term care insurance?

As with any type of insurance, you’ll need to fill out an application. For LTC insurance, you’ll also have to answer some medical questions. LTC policies usually have a maximum amount they pay out per day and a total they will pay out over your lifetime, so you’ll want to decide the amount of coverage you’ll need before you apply. If you’re approved for coverage, the insurer issues you the policy and you begin paying premiums.

Who sells long-term care insurance?

You can buy an LTC policy from an insurance company, through an agent, or through certain employers who offer group discounts to employees. Usually when you buy employer-provided coverage, you’ll have to answer some health questions. But it may be easier to qualify than going it alone. Even if you’re offered a plan at work, it’s a good idea to comparison shop by getting quotes from other companies for the same coverage. The American Association for Long-Term Care Insurance advises working with an experienced long-term care insurance agent who can sell products from at least three carriers. (In its 2016 price comparison, the association found that rates varied among insurers by as much as 94%.)

How old is too old for long-term care?

There are significant benefits to purchasing long-term care insurance earlier in life. For starters, LTC insurance premiums increase as you age. So a policy you purchase at 70 would have significantly higher premiums than one you purchased at 50 with the same benefits. Also, the earlier you apply, the more likely you are to be approved. Over 40% of applicants 70 or older are denied coverage. (That number is only around 7% for applicants in their fifties.) At a certain age, the premiums you’ll have to pay will likely outweigh the benefits. The best way to determine what’s right for you is to get quotes from a number of different insurers.

When can I use the policy?

You’re generally eligible to collect benefits when you can no longer do two or more activities of daily living (ADLs) on your own—or if you have dementia or another cognitive impairment. It’s common for people to wait longer than necessary before they apply for their benefits. Yet accessing home care earlier can extend your ability to continue to live at home, so don’t delay.

Did you know?

  • Over 8 million Americans are protected with LTC insurance.
  • Your life insurance policy may include long-term care benefits.
  • Over 50% of newly opened LTC insurance claims paid for home care rather than care in assisted living or nursing homes.

What are activities of daily living?

Think of your normal routine when you get up each morning. ADLs are the basic tasks you do to take care of yourself:

  • Transferring (getting out of bed, walking, and sitting down)
  • Toileting (going to the toilet, cleaning yourself, and getting back up)
  • Bathing or showering (washing your body)
  • Dressing (selecting appropriate clothing for the day, buttoning buttons, tying shoes)
  • Self-feeding (sitting down to a meal and eating)
  • Grooming (brushing teeth, combing hair)

When should I file a claim?

File your claim as soon as there are signs that you or your loved one needs care. It takes time to process your claim and many insurance policies include waiting periods—called elimination periods—after the claim is made before they’ll actually pay out. Under most policies, you’ll have to pay for long-term care services yourself for 30, 60, or even 90 days before your insurer starts reimbursing you. So don’t wait until you’ve depleted your resources to file a claim.

How do I make a claim?

Submit a claim directly to your insurer, providing the medical documents they ask for. The insurance company reviews your claim and will likely send a nurse to your home to assess your needs. Before approving a claim, the insurer must approve a "Plan of Care" for the care recipient, detailing what services will be provided.

How is my Plan of Care determined?

After you have been assessed, your insurance company care manager will provide an approved Plan of Care that outlines the benefits you are eligible to receive.

How much does long-term care insurance cost?

The rates you pay depend on a variety of factors:

  • Age and health: The younger and healthier you are, the less you’ll pay when you purchase a policy.
  • Marital status: Married people usually pay lower premiums than single people.
  • Insurer: Insurance companies vary widely in what they charge for the same level of coverage. So, you’d better shop around!
  • Level of coverage: Your cost will depend on the level of coverage you get. Higher limits on daily and lifetime benefits will be more expensive. Shorter elimination periods and fewer restrictions on the types of care covered also will cost you more.

Are women more likely to need LTC than men?

Quite possibly. On average, women outlive men by about five years. They also have higher rates of disability and chronic health problems. And typically who are our family caregivers? That’s right, usually women. Whether married, widowed, or single, there is a far greater risk of needing long-term care, and a far greater likelihood of actually receiving benefits from a policy if you are a woman. You’ll pay the same the same rates as men for LTC insurance, so consider protecting your future self now with LTC insurance.

Could my LTC insurance cost go up the older I get?

Yes, it could. Prices are not guaranteed to stay the same over your lifetime.

Do I get any tax breaks by buying long-term care insurance?

Yes, LTC insurance can have its advantages if you itemize deductions—particularly as you get older. Federal and some state tax codes allow you to count part or all LTC insurance premiums as medical expenses, which are tax deductible if they meet a certain threshold. The limits for the amount you can deduct increases with your age. Be sure your policy is a tax-qualified long-term care insurance policy for which your premium counts as a medical expense. The policy has to meet certain federal standards and be labeled as tax-qualified. Ask before you buy!

As you make a long-range financial plan, the potential cost of long-term care is one of the important things you’ll want to consider. Talk to a financial advisor about whether buying long-term care insurance is the best option for you.

What’s a state partnership plan?

Most states have partnership programs with long-term care insurance companies to encourage people to plan for their long-term care. With these types of plans, the insurers agree to offer policies that meet certain quality standards. For example, they may provide cost-of-living adjustments for benefits to protect against inflation. In return for buying a partnership policy, more of your assets can be protected if you go through all of your long-term care benefits and then want help through Medicaid. Check out the American Association for Long-Term Care Insurance list of State partnerships to see if your state has an LTC partnership program.


If you or a loved one has LTC insurance, we can help you understand your coverage, assist you in filing a claim, and answer other insurance questions you may have. Want to be sure your long-term care insurance will cover Honor or have other questions about insurance? Give us call at (877) 777‑5116.

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