Long-Term Care Insurance

Long-term care (LTC) is defined as a need for assistance with some of the activities of daily living (often called ADLs). ADLs include functions that most of us perform each day, like eating, bathing, using the bathroom, dressing, transferring and maintaining continence. The need for assistance may be due to physical inability or mental impairment, such as memory loss, Alzheimer's or dementia. 

The reason to buy long term care insurance is to protect your assets in case you need to pay for assisted living, home care or a nursing home stay. Long-term care insurance helps you pay for these services, which can be very expensive and, over time, can be financially devastating. A policy also ensures that you can make your own choices about what long-term care services you receive and where you receive them in advance.

Within the long-term care insurance contract, there are two broad levels of care outlined in the policy, including:

• Skilled Nursing Care: This is usually for someone with an acute condition that requires intensive medical attention for a period of less than 100 days. The two objectives of skilled care are to help the person with comfort and assistance if the situation is terminal or to assist the person during a recovery period.
  
  
• Hospice Care: This is the term used for the care provided to individuals facing a terminal condition, or who have less than six months to live. This care can be provided in a home or a facility.
  
  
• Non-Skilled Nursing Care/Custodial Care: This is for a person with a chronic condition from which he or she will not recover. This type of care is usually received at home or in assisted living facilities. This type of care lasts beyond 100 days, and even up to several years.

There are many settings in which long-term care can be administered or provided. The type of LTC policy determines where you can receive your services. 

• Home Care: Pays for care in your home. According to "Long-Term Care Planning" (2007) by Allen Hamm, as of 2007, more than 10 million people received care at home and home care is projected to increase 178% by 2030.
  
  
• Facility Care: Pays for care in a facility, such as an assisted living community, adult day center, continuing care retirement community or nursing home.
  
  
• Respite Care: Pays for services that enable some relief (rest or vacation period) to family members providing care giving. This can be provided either in the home or at a facility.