Mint Money Knowledge Center: What is long-term care insurance?

What is long-term care insurance

By 2020, 12 million Americans over the age of 65 are expected to need some form of long-term care, according to Morningstar. Long-term care provides assistance with custodial care and other expenses, and long-term care insurance helps offset the costs of those services, supplies, and treatments.

Why Might You Need Long-term Care?

If you become disabled, suffer from dementia, or develop a serious or terminal illness, you might require long-term care. This might involve residence in a nursing home or assisted living facility, which costs significant money. Additionally, it could include services provided by adult day care centers, in-home care providers, and private nursing.

The precise requirements of a person who needs long-term care vary widely. Each long-term care insurance policy defines the precise types of care it covers and the dollar amount the care must not exceed.

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What are the Terms Associated with Long-term Care Insurance?

Long-term care insurance providers create policies that cover specific parameters. Your policy might allow you to spend a certain amount of money on care expenses per day, with a year or policy maximum.

Additionally, the premiums associated with long-term care insurance increase as policy holders get older. You might have to pay premiums on the policy for 12 months or longer before you are qualified to receive benefits.

In some cases, consumers who already suffer from serious illnesses are not eligible for coverage.

Understanding long-term care insurance helps you plan adequately for your future.

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