Long-term care insurance (LTCI), also known as nursing home insurance, is the only form of insurance that will pay for long-term nursing home care.
Long-term care insurance (LTCI), also known as nursing home insurance, is the only form of insurance that will pay for long-term nursing home care. If you are single, the odds are 50 percent that you will need long-term nursing home care at some point in your life. If you are age 65 and married, the odds are 75 percent that you or your spouse will need long-term nursing home care. The average nursing home stay is 2.5 years, at an estimated national average of more than $75,000 a year.
And yet, most people do not have long-term care insurance. One reason people fail to purchase LTCI may be that they simply do not know about, or understand the product well enough to make a purchase. Last week I came across an article online that did an excellent job of explaining the various types of long-term care insurance, including Traditional, Partnership, Annuity-Based and Life Insurance-Based. I encourage you to read the entire article here, but in a nutshell:
- Traditional Long-Term Care Insurance is based on a maximum daily benefit for a period of time.
- Partnership LTCI protects assets from a Medicaid spend-down. Should you run out of benefits, the amount of coverage paid out protects an equal amount of assets should you go on Medicaid.
- Annuity Based LTCI is a newer product. An annuity with an LTCI rider enables you to take payments from an annuity to pay for long term care expenses tax-free.
- Life Insurance Based LTCI is basically a life insurance policy with a long-term care rider. If you need long-term care, then these policies will pay a percentage of the death benefit every month for a preset number of years.