Long-Term Care Insurance


Long-term care insurance is a contractual arrangement that pays a selected dollar amount per day for a selected period of time for skilled, intermediate or custodial care in nursing homes and/or home health care. Because Medicare and other forms of health insurance do not pay for custodial care, many residents of nursing homes have only three alternatives for paying their nursing home bills: their own assets, Medicaid and long-term care insurance.

Long-term care refers to a range of medical and personal services that provide ongoing care for people with chronic disabilities who have lost the ability to live independently. The risk of contracting a debilitating illness (and the resulting medical bill) is usually one type of risk best assigned to an insurance company through the purchase of a long-term care insurance policy, a life insurance policy with a long-term care rider, or a hybrid life and long-term care insurance policy.