Long-term care insurance (LTC) is a special type of insurance that pays for the cost of care when an individual is no longer able to complete 2 of the 6 activities of daily living (ADL).
The six standard ADLs are generally recognized as bathing, dressing, toileting, transferring (getting in and out of bed or chair), eating, and continence.
Once a licensed medical doctor certifies in writing that you are unable to complete 2 of the 6 activities of daily living (ADL) then this will “trigger” the long-term care policy to kick in so the insurance benefits can start being paid out the beneficiary of the policy to help pay for daily care of the insured.
Long Term Care Insurance pays for costs of medical care which can include hospital, nursing home services & facility, home medical care and cost of caregivers.
There are two types of Long-term care (LTC) insurance policy riders that you can purchase.
This is an insurance contract that guarantees you a daily insurance benefit if you are unable to complete 2 of the 6 activities of daily living (ADL).
The insurance premiums are typically variable and can increase over time. The insurance commissioner of the state will approve rate increases which are requested by the insurance carriers.
These policies do not carry a “cash value” and if you don’t use the insurance, you lose the benefit, like auto insurance.
This is an insurance rider on a life insurance policy that comes as an added benefit to the life insurance, the long-term care rider has a cost which will make the insurance premium payments higher.
These type of insurance policies are more popular now because your beneficiaries are guaranteed to receive life insurance proceeds upon passing or the owner and beneficiary of the long-term care policy will receive insurance benefits if the owner and beneficiary of the policy is unable to complete 2 of the 6 activities of daily living (ADL).
Long Term Care Insurance is a part of the financial and estate planning process.
Depending on your personal circumstances, it may or may not be financially prudent, the advisors at Glover Park Wealth Management would be happy to discuss with you and your family.