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Long-Term Care Insurance Options | Frequently Asked Questions

Long-Term Care Insurance

A recent survey indicated that 90% of Americans do not have a practical plan to pay for long-term care. Almost half mistakenly believe that health insurance or a government program, for example Medicare, will pay the long-term care costs.

About one-quarter of the respondents said they were relying on family or friends. What’s alarming is that according to the U.S. Department of Health and Human Services, 70 percent of Americans over the age of 65 will need long-term care services at some point in their lives.

Long-term care insurance pays for nursing-home care and other expenses not covered by Medicare, supplement plans, or health insurance – for policyholders who cannot live independently. Long-term care insurance has grown in popularity as policy holders don’t want to burden their loved ones if they fall ill.

Insurance Options


The basic policy is a product similar to term life insurance. Buyers pay a set premium that increases as they age, capping at a maximum amount spelled out in the policy. Buyers have the opportunity to select how much money they would like to receive each month for long-term care, and how long the benefits would last.

Hybrids – Life and Long-Term Care Combination

One option is to include a rider allowing policyholders to receive advance payments (from their life insurance policy), using these funds to pay for long-term care. Another hybrid option offers a rider to extend the death benefits – once they’re exhausted – to continue to pay for long-term care. All these proceeds are tax-free.


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Average Costs of Long-Term Care..

Private room - Nursing Home:
$79,935 Annually

Semi private room - Nursing Home:
$72,270 Annually

One bedroom - Assisted Living Facility:
$37,572 Annually

Home Health Care - 40 hrs per week:
$43,680 Annually

Adult Daycare Center - 5 days per week:
$16,823 Annually

(Source: U.S. Dept. of Health and Human Services)