Taking The Mystery Out Of Long-Term Care Insurance

Here's the good news: with improvements in medical 
technology and healthier lifestyles, people are living 
longer. Life expectancy today has increased to 83 years, up 
from 78 years in 1940 (The Shopper's Guide to Long-term Care 
Insurance from the National Association of Insurance 
Commissioners).

However, the longer people live, the greater the chances 
they will need assistance due to chronic health conditions. 
Today, about 12.8 million Americans of all ages require some 
type of long-term care (National Academy on Aging, 1997). 
This number is expected to climb as the baby boomer 
generation moves into retirement. Over a lifetime, nearly 
50 percent of all people will require some type of long-term 
care assistance.

One way to pay for some or all of your long-term care 
expenses is insurance. First introduced in the 1980s, 
long-term care insurance was originally designed as nursing 
home insurance. Today's long-term care policies now cover 
much more. They include home health care, assisted living 
facility care, adult day care, Alzheimer's facility care, 
respite care and hospice care.

So how does long-term care insurance work? Long-term care 
insurance is not health insurance, and long-term care 
expenses are not covered under private health insurance, 
Medicare or Medicare supplement policies.

However, long-term care insurance is similar to health 
insurance in that an individual must apply for coverage by 
going through medical underwriting. The insurance company 
decides whether to offer long-term care coverage based on 
your current health conditions and age. In most instances, 
a person's medical records will be reviewed by the insurance 
company. Additionally, some applicants may be required to 
have a face-to-face or a telephone interview. Not everyone 
is insurable. People who already have health problems are 
likely to need long-term care but won't be able to buy a 
long-term care insurance policy. Your money may pay for 
long-term care insurance coverage, but it's your health that 
buys it.

Once a long-term care policy is issued, the insured 
individual becomes eligible to receive benefits once a 
healthcare professional certifies the insured is 
"chronically ill" -- unable to perform two of the Activities 
of Daily Living (ADLs) for a period of 90 days or longer; or 
be severely cognitively impaired. ADLs include bathing, 
eating, dressing, toileting, transferring (moving into or 
out of a bed, chair or wheelchair) and continence.

"At what age should I apply for long-term care insurance?" 
Generally, experts suggest you apply between ages 50 and 55. 
The younger you are when you apply, the better the chance 
you will be healthy enough to qualify. It's also during 
these years prior to retirement that your income is normally 
at its highest and you're better able to pay the insurance 
premiums.

Long-term care insurance policies vary widely. A 
professional specializing in long-term care insurance can be 
a great resource to consumers in considering the many 
options available today.