Traditional long-term care insurance is a no-frills, standalone insurance policy. All it does is offer to pay for long-term care services when you need them. That’s it!

When does a traditional policy kick in? The policy is triggered when you can no longer perform two out of six activities of daily living (such as dressing, bathing, eating, or transferring to a wheelchair) or suffer from severe cognitive impairment. After a waiting period of 30–90 days, your benefits should start coming in.

Another option is a policy that combines life insurance with long-term care coverage. With a hybrid policy, you can access the death benefit—the money that your beneficiaries would receive in the event of your death—while you are still alive to pay for long-term care.

And if you end up not needing care, your heirs get the full payout. Rates are considered “noncancellable,” which means premiums are fixed for life.

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About half of 65-year-olds today will eventually develop a disability and require some long-term care services, according to a study revised in 2016 by the Urban Institute and the U.S. Department of Health & Human Services. Most will need services for less than two years, but about 14% will require care for more than five years.

Regular health insurance doesn’t cover long-term care. And Medicare won’t come to the rescue, either; it covers only short nursing home stays or limited amounts of home health care when you require skilled nursing or rehab. It does not pay for custodial care, which includes supervision and helps with day-to-day tasks.

If you don’t have insurance to cover long-term care, you’ll have to pay for it yourself. You can get help through Medicaid, the federal and state health insurance program for those with low incomes, but only after you’ve exhausted most of your savings.

Purchasing long-term care insurance can give you peace of mind and protect the savings you worked so hard to build. You’ll know that if you become ill, you can afford the care you need and still have enough money in your nest savings for you and your spouse. Plus, your kids won’t be burdened with huge payments for your care.

If you have any questions on Long Term Care Insurance or want to compare the best policies, contact us today!