Long-term care (LTC) refers to the range of services and supports you may need over a long period of time if you are unable to care for yourself because of chronic disability or illness. Long-term care includes medical care as well as custodial care for normal daily tasks like dressing, bathing, toileting, eating, etc. These are known as “activities of daily living” — ADL for short.
The costs of long-term care have been rising steadily, and there is no reason to think this trend will stop. Spending even just a few years in a skilled nursing or assisted living facility could wipe out a lifetime of savings.
Long-term Care Insurance (LTCi)
Long-term care insurance (LTCi) provides coverage for the costs associated with long-term care in a variety of settings such as:
- your own home
- a nursing home or assisted living facility
- other community setting
Although it is not pleasant to think about needing long-term care, planning ahead for the possibility is an important part of a sound financial plan.
The best time to purchase long-term care insurance is when you are young and healthy. Although it is never too late, we recommend you start thinking about buying coverage in your 40’s or 50’s. Once you develop health problems, it becomes more difficult – and more expensive – to secure coverage.
As with the purchase of any type of insurance, buying LTCi is finding the balance between cost and coverage. A plan can be tailored to your specific needs by adjusting the following according to your wishes:
- The maximum daily benefit
- The maximum number of days (or years) of coverage
- The lifetime maximum benefit
- Optional benefits