Long-Term Care Insurance
Prepared by Laurel L. Kubin
Larimer County Office of
Colorado State University
Long-term Care Insurance Decisions
Should I purchase long-term care insurance ? ? ? ? ? ? ? ?
Step back and evaluate:
1. The risk of needing long-term care
2. Options for funding long-term care
3. Questions to ask about long-term care coverage
“We didn’t think it would turn out this way.”
“No one plans to have their health change
or wants to admit they might need long term
“We planned for a shorter and healthier
“I never expected to live this long!”
Assess the risk of needing
The long-term care population is diverse in age
and level of disability.
There is a risk across the lifecycle:
57% over age 65
40% below age 65
3% are children
Who is most at risk?
Individuals 85 years and older
• Need help with more activities of daily living (ADLs)
•Experience higher rates of home care and nursing home use
Individuals with chronic health problems
Individuals who lack social support and unpaid caregivers
Prevalence of Long-Term Care Need
Age 65 - 74
In Community: 11%
In Institution: 1%
Age 75 - 84
In Community: 22%
In Institution: 5%
In Community: 49%
In Institution: 21%
The risk is not just a senior issue:
Nearly half of all Americans will need long-term care at
some point in their lives. One in five over age 50 is at risk
of needing long-term care within the next 12 months.
American Health Care Assn
While 60% who will need long-term care are 65 or older,
40% are working age adults between 18 and 64.
People Using Long-Term Care
Of the >12 million people needing long-term care, only
1.5 million are in nursing homes. Other choices include
home care, assisted living, and adult day care.
Half of the nursing home stays are less than 90 days.
Three fourths are less than one year
One in four will spend a year or more in a nursing home.
One in 11 will spend five years or more.
Men average two years in a nursing home.
Women average four years in a nursing home.
Only 41% of patients regain mobility after hip fracture
People most likely to regain their ability to walk
independently are under age 85 and live with another person.
Long-term Care Costs
National average for nursing facilities is over $50,000 / year
Some Colorado and Wyoming Assisted Living facilities
charge more than $70,000 / year
Home care charges vary between $10 / hour and $25 / hour
depending on location and type of service.
Plan for inflation. Costs will undoubtedly increase by the
time you need this assistance.
Will YOU need long-term care?
No one knows!
Look at your family health history:
Family members live into their 80s, 90s, and 100s?
Family members experience conditions such as
Alzheimer’s or dementia
Lou Gehrig’s Disease
Diabetes with amputation or complication affecting kidney
Transient Ischemic Attack (TIA)
Dealing with the risk:
1. Avoid it: hope for the best and stay healthy
2. Retain it (self-insure): use your own assets to pay
3. Transfer it: buy a long-term care insurance policy
4. Do it all: stay healthy, self-insure as much as you can,
buy insurance to make up the difference
Consider Your Goals
Protect your assets? Leave an inheritance?
Minimize dependence on others?
Control where and when you receive long-
term care services?
Use some or all of your assets for your
long-term care needs?
Resources to Help You
Community-Based Services: Contact Area Agency on Aging
Resources that help you live at home:
Home chore services
Assistive devices / Home adaptations
Friendly Visitor or Companion services
Home health care
Family, friends and neighbors
Adult day care
Options for Financing
Current income from wages, Social
Security, or retirement income
Single premium life insurance
Long-term care insurance
Long-term Care Considerations
* Do you have assets of at least $75,000 (excluding your
home and car) and income of at least $25,000 to $35,000?
* Would the premium be more than 10% of your
* If you have few assets and limited income, you might not
be able to afford long-term care insurance premiums.
Relying on Medicaid may be the best option for you.
* Do you have unpaid family caregivers nearby?
Medicare ONLY pays for the first 20 days in a skilled
nursing facility after hospitalization.
For the next 80 days there’s co-pay of $100 per day,
with many restrictions.
After these initial 100 days following hospitalization,
Medicare DOES NOT pay for long-term care.
Medicare DOES NOT pay anything for assisted living costs.
Medicare does pay for skilled care and home health aides
only if the patient is homebound and meets other stringent
Sample Long-Term Care Insurance Rates for Age Groups
Rates for $100 per day benefit:
Age 2 years Lifetime
45 $400 $1,200
55 $550 $1,800
65 $1,000 $3,000
75 $2,250 $7,000
If You Decide to Purchase Long-
Term Care Insurance:
Determine the amount of daily benefit,
length of coverage, deductible (elimination)
period, and level of inflation protection you
Compare at least three different company’s
Use the comparison chart to record all the
information you acquire about each policy
Comparison Chart Questions
Company’s financial Premium waived
rating? while receiving care?
Company’s LTC Benefit triggers?
experience? How are benefits
Levels of care covered paid?
Prior hospital stay Is adult day care or
required? respite care covered?
Cover cognitive Caregiver training
Bed reservation? Who are the
Marital discount? gatekeepers?
Preferred health Guaranteed
3rd party notification? Inflation coverage?
Elimination period Non-forfeiture
satisfied only once benefit?
during your lifetime? Policy cost?
Q & A:
** When is the best time to purchase long-term care
Most advisors recommend age 60, plus or minus 5.
** Are you insurable?
People who are in good health, non-smokers, with no
history of osteoporosis or serious illness are more insurable.