Long Term Care Insurance

What is long term care?

Long term care insurance has become an important consideration for everyone's financial plan due to the increasing costs of long term care services.

Long term care addresses a wide range of long term care and supportive services for people who may have cognitive impairment or who are unable to accomplish certain activities of daily living over an extended period of time. These include activities such as bathing, continence, dressing, eating, toileting, and transferring.

Long term care services can be provided in a variety of settings, including your home, assisted care facilities (residential care facilities) or nursing homes; and it can be very expensive.

Some Options

Self-insure. This means you would pay-as-you-go and use your own assets when you require long term care. For example, if you have equity in your home, you could re-finance it at the then current mortgage rates. The risk is that this money you've worked for all of your life—your savings and investments nest egg—could be depleted due to the high costs of long term care. Note, some people's income is sufficient to cover care costs, without having to liquidate assets.

Rely on care from friends and family members. This involves many complications, including their time, their skills, their physical strength, their financial ability to care for you, the emotional toll on both the caregiver and the care receiver, and the challenge of geographic distances.

Fortunately, there are options like long term care insurance policies that can help protect you.