As we age, planning for the future becomes more important than ever. One crucial aspect of long-term care planning is ensuring access to quality care in the event of illness, disability, or other health concerns. 

Long-term care insurance (LTCI) is designed to help cover the costs of extended care services, whether at home, in an assisted living facility, or in a nursing home. At Assisting Hands West Houston, we believe in empowering families with knowledge so they can make informed decisions. In this guide, we’ll walk you through all you need to know about long-term care insurance.

What is Long-Term Care Insurance (LTCI)?

Long-term care insurance is a type of insurance policy that helps pay for the cost of long-term care and services not typically covered by health insurance, Medicare, or Medicaid. The cost of long-term care can add up quickly. Without adequate insurance coverage, these expenses can deplete savings and put financial strain on families.

Most LTCI plans cover:

• Assistance with daily living activities (ADLs)
• Nursing home care
• Hospice care
• Respite care
• Adult daycare services
• Assisted living costs
• Skilled nursing

Some policies may also include benefits for home modifications, caregiver training, and durable medical equipment.

Types of Long-Term Care Policies

There are several types of LTCI policies available for residents of Houston, including:

• Individual policies: These policies are the most common and are bought directly from insurance companies. 
• Group policies: This kind of policy covers a group of people, such as employees at a company.
• Federal and state government policies: These policies are offered to federal or state employees and their families. The Federal Long-Term Care Insurance program is one example.
• Association policies: Some associations, such as the State Bar of Texas, offer LTCI to their members. 
• Texas Long-Term Care Partnership policies: The Texas Long-Term Care Partnership, a collaborative effort between the state of Texas, private insurance companies, and agents, assists Texans in planning for their long-term care needs. These policies offer unique benefits, features, and consumer protections not found in other long-term care policies.

How Long-Term Care Insurance Works

Long-term care insurance operates similarly to other types of insurance policies. You pay a premium — either monthly, quarterly, or annually — and in return, the policy provides financial coverage for eligible LTC services when needed. 

Policies typically include an elimination period, the waiting time before benefits begin. Once this period is met, the policy reimburses costs for covered services up to the policy’s limits. Some policies offer reimbursement based on actual expenses, while others provide a predetermined daily or monthly benefit amount. 

The extent of coverage and benefit period depends on the specific policy chosen.

How To Shop for Long-Term Care Insurance

Shopping for LTCI can be a daunting task, so it’s important to consider a variety of factors when it comes time to choose an LTCI policy. 

How Insurance Companies Factor Rates

Here’s what insurance companies look at when determining rates:

• Age: Premiums are lower when you are younger, so it’s generally advisable to purchase LTCI in your 50s or early 60s.
• Health: Premiums are also lower the healthier you are.
• Gender: Since women generally live longer than men, women tend to pay more because they have a greater chance of making LTCI claims. 
• Marital status: Premiums are lower for those who are married than for those who are single.
• Area of residence: LTC costs can vary from one area to another.
• Coverage amount: Premiums are higher for policies that pay more benefits for a longer period of time.

Other Factors For Choosing LTCI

Now that you have a better understanding of how insurance companies determine their rates, here are some additional factors to consider:

• Eligibility requirements: Policies may have different criteria for when benefits begin, such as requiring assistance with a certain number of daily activities.
• Elimination period: Shorter elimination periods typically result in higher premiums.
• Inflation protection: This ensures that benefits keep pace with inflation/rising healthcare costs.
• Coverage amount and duration: Look at how much a policy will pay per day and for how long. Most policies pay for a maximum daily amount of LTC, and when you buy the policy, you choose the maximum daily benefit. Also, most people choose a policy that covers 3 to 5 years of LTC.
• Tax-qualified: A policy will specify if it’s tax-qualified or non-tax-qualified. A portion of the premiums paid for a tax-qualified policy can potentially be deducted as medical expenses on your income tax return.
• Nonforfeiture benefit: This allows policyholders to keep some benefits even if they cancel or lose the policy. The benefits you receive depend on how much you’ve paid in premiums and how long you’ve had the policy.
• Preexisting condition waiting period: Some policies have an extended waiting period for preexisting conditions.

Keep in mind that prices vary across insurance companies, so be sure to shop around and get quotes from several insurance providers. Also, remember to only buy from licensed insurance companies and agents. Some agents specialize in LTCI, and having an agent with this experience and knowledge will help you choose the best policy for you.

How Assisting Hands West Houston Can Help

Planning for long-term care is a vital part of securing your future and protecting your loved ones from financial stress. Long-term care insurance can provide invaluable support when the time comes. 

At Assisting Hands West Houston, we are here to help you navigate your options and ensure you receive the quality care you deserve. If you have questions about LTCI, long-term care, or need assistance with in-home care services, contact us today by using the chat box on this page or by calling us directly at (281) 369-5858.