Long Term Care Policies: Are they worth it?


Before we run through all the information in the following paragraphs, let us jump right into the actual answer to that question: It depends on what you need!

Long Term Care Policies are defined as an insurance policy that is designed to offer financial support to pay for long term care services. Now some might ask, what constitutes as “Long Term Care”. In truth, this “Long term care” does not have to be long term at all. It could be a matter of weeks, months, or years. This is simply a period of time that you or your loved one needs assistance. Whether it be medical, or non-medical. There are several different things that could be covered by an LTC policy.

  • Nursing Homes
  • Assisted Living Facilities
  • In-Home Health Care
  • Non-Medical Home Care

Now as we get into the nitty gritty, you’ll read the words, “refer to your policy” multiple times. So to forewarn you, I’ll tell you now. Every LTC policy is different. Every policy holder is different, and thankfully there are companies out there who are very good at catering to your exact needs when you sign up with them. Whether it be medical needs or financial. So just remember “Refer to your policy”.

The Benefits of Having an LTC:

Financial backing: As a policy holder, you are paying an insurance company a monthly premium to a specific benefit amount. It allows you to specifically set aside money for your own future benefit should you need to use the money for your own care. As you pay your monthly premium, you have access to the listed benefit amount. Should later in life you decide to use the policy, it will allow you a specific amount that you can use, giving you assistance with the financial side of care.

Peace of Mind: Having a LTC can absolutely help you relax a moment as you think about the future. Having a specific thing such as an LTC in place will help you find direction in your time of need, as well as your family members.

The Fine Print:

Each policy is different, wait, I said that. You will have to read your policy, wait, I said that too! All joking aside, reading your policy and understanding it is one of the most important things you can do as a policy holder or perspective policy holder. Whether you are looking into buying a policy, or wanting to use it. Some of the downsides of an LTC are:

Clauses: To have access/be able to use the benefit amount in your policy, you have to follow the declarations and rules of the policy. For example, most policies will only cover the cost of Home Care, if services are being provided by a Licensed and certified Agency. This means, that should you have a family member, or friend or spouse who is able to care for you, you cannot use the benefit amount in your policy to pay them for their services. This may come across as constraining and frustrating. It’s your money, right? Why shouldn’t you be able to do what you wish with it? This is because the insurance company wants to be sure that you are getting the most appropriate care.

Benefit Limitations: Most LTC policies with either have, monthly, weekly, or daily maximums. Or have all the above. Be sure to read your policy! (I knew you were waiting for it!) This means that no matter what services are being provided, there is only so much in that the policy will cover in that time frame. As an example, and for easy math, let’s say you are using a Home Care Agency, and at the end of the month, the invoice is $1000. But your LTC policy has a $700 monthly benefit amount. This means that $300 will not be covered by the policy, leaving you to pick up the rest of that bill as Private Pay.

So, why get an LTC?

Long Term care is expensive. It’s also necessary. If you have a steady income, but don’t have a decent sum of money set aside specifically for you or your loved one’s care, an LTC policy might be for you. If you don’t need access to that premium once it has been paid, an LTC might be for you. It will allow you to set aside a “premium” on a monthly basis, that will benefit you should you need Long term care services in the future.

Why NOT get an LTC?

If you want to have access to any money that you save, regardless of when and how much, an LTC might not be for you. If you have a plan for your Long Term Care that is directly related to you being cared for by an individual who is not licensed, nor an agency; having to jump through hoops and declarations of an LTC might not work for you.

What if you don’t know?

A Caring Hand and Heart has dealt with several LTC policies. We understand a lot of the lingo in the policy you’re looking at. We are a Licensed and Certified company and are able to help you use a LTC policy to the best of it’s benefit. If you need help with understanding your policy, or would like to begin using it, call us. Because we are here to help!

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