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Long Term Care (LTC) insurance covers the cost of home health care and/or rehabilitation therapy, a skilled care facility, an assisted living facility, an adult day center or alternative plan of care of your choice for time periods ranging from two years to life.

What does long term care insurance actually give you?

Long term care kicks in if you are either diagnosed with a severe cognitive impairment or unable to perform two out of six activities of daily living (bathing, dressing, eating, toileting, transferring, or continence).

Long term care insurance will pay for either a set benefit period (5-years, 10-years, etc) or for life, and will give you a pre-determined dollar amount per day to help cover the cost for your stay in a facility of your choice or to help cover the cost of home health care/rehab, etc.

Dollar amounts typically range from $75 to $500 per day, and can often be adjusted upward for inflation.

You will typically receive a lifetime budget for home support services such as home modifications, caregiver training, medical equipment, emergency medical response systems and more.

What will long term care cost? Calculate it here.

Think you won't need long term care or that you can rely on your health insurance or Medicare to cover the cost?

Odds are you'll need LTC:
70% of Americans over 65 need some form of LTC; with 18% of all boomers expected to develop Alzheimer's in their lifetime, the numbers increase.

It's not just for the elderly:
40% of people who need long term care are between ages 18-65.

Skyrocketing costs:
The average, annual long term care cost is $74,000. In 10 years, the annual cost for a private room in a nursing home will rise to $108,507. In 20 years, that number rises to $194,320.00. In 40 years, we'll see costs of $623,212 per year. The average length of a facility stay is 2.4 years. Paying for long term care can drain your assets.

Health insurance & Medicare won't cut it:
Health insurance benefits do not cover long term care. Medicare will only cover 100 days in a skilled nursing facility (with stipulations) – not long term care nor custodial care.

Medicaid is not a good alternative:
In Texas, in order to qualify for Medicaid, you must impoverish yourself, spending your assets down to $2,000 or less. Any income you receive must go to long term care costs, excluding a monthly income of $30-50. At death, Medicaid reserves the right to take from your estate to the amount that it paid for your nursing home or skilled facility care.

Tax treatment:
In Texas, individuals can deduct a portion of premiums. Additional deductions available for employers, sole proprietors, partnerships, LLCs, S-Corp's and more. Benefits received are almost always tax free.*

Pay with pre-tax dollars:
You can pay LTC insurance premiums with pre-tax dollars in a Health Savings Account (HSA), up to an age capped limits.

*Always consult your tax or legal professional for exact information regarding tax treatment.