On the previous page you saw that after 100 days (or after you stop improving) your health insurance and Medicare can stop paying for care. Once these benefits end you must either pay yourself or apply for Medicaid, or spend down your money until you do qualify for Medicaid.

Long term care insurance is designed to cover the gaps in our health care system. If you don't have much money or assets to protect then long term care insurance may not be for you, more than likely if you need long term care you will be on Medicaid (welfare). If you do have savings, a pension, or assets - you can either pay yourself of get LTC insurance. You can only get LTC insurance if you can health qualify.

Long term care is not necessarily long term. You may be laid up for only a few months recovering from an accident, surgery, or illness. Because of advances in medicine people are now using their long term care insurance multiple times.

Almost all long term care is "custodial care" which is basically help with Activities of Daily Living or ADLs* — like dressing and bathing. Custodial care is not covered by health insurance, Medicare, Medicare Supplement Insurance, or Medicaid.

Long term care insurance generally covers custodial care whether in the home or a facility. In fact there are few limitations to where one may receive care — even at a vacation home, cruise ship, etc. — as long as they qualify for benefits and can find someone to provide care.

Long term care insurance can cover all types of home and community care including home health care, personal care, homemaker services, adult day care, and other fee based community care. Insurance also covers care at assisted living or residential care facilities, and skilled nursing facilities or nursing homes, including Alzheimer's facilities.

Other benefits often included in long term care insurance are:
• An allowance for special equipment or home modifications to make your home safe.

• Most policies offer survivorship for couples — after 10 years if one dies the survivor doesn't pay any more premiums for their policy.

• Couple can qualify for a discount. Others may qualify for a couples discount if they share living expenses and are the same generation (siblings, partners, friends).

• Caregiver training that professionally trains an unpaid caregiver.

• Respite care that provides a professional caregiver a few weeks a year to give the unpaid caregiver a break.

• Bed reservation in case you have to go to the hospital from the facility.

• A professional care coordinator.

• Premiums are waived when on claim.

If you've ever had to or known anyone who has had to arrange and manage long term care, you'll appreciate the use of a professional care coordinator. They are usually a local nurse who is independent of the insurance company and is paid to make sure you get whatever you need for your care. This takes a tremendous burden off the spouse, family or friends.

To qualify for long term care insurance benefits usually a medical professional needs to determine that you need assistance with at least two of the six Activities of Daily Living* (called ADL's) for at least 90 days. Often if you cannot do one ADL, you cannot do two, for example bathe and dress. The Activities of Daily Living are: Dressing, Bathing, Eating, Transferring, Continence, Toileting.

Assuming you can health qualify with a top company with good rates (like a good driver), there are three main factors to determine the long term care insurance premium. Your age, the Daily or Monthly Benefit, and the Benefit Term (how long benefits are paid).

If you have health issues then you may either qualify for sub-standard (higher) rates with a better company or higher rates and low benefits with an average company. Of course if you are somewhat healthy you would want to qualify with the better company because being in a pool of healthier people lessens your risk of a rate increase in the future.

The average insurance claim is 3 years and the average cost for care is $5,000-6,000 per month. Some people will insure for the total risk (3-6 years, $6,000+/month) and some will insure for less to get a lower premium, knowing they will have to make up any difference out of pocket.

Premium formula:

Age + month benefit + benefit period = premium (depends on the state you live in)

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