Stand-alone long-term care (LTC) insurance policies are also known as traditional long-term care insurance.
The USAA long-term care insurance offering is a universal life insurance policy with a long-term care rider. This policy, from John Hancock Life Insurance Company, focuses more on the death benefit than the long-term care benefit.
A good comparison to the USAA long-term care insurance offering is the Nationwide Insurance universal life policy. It makes a great comparison because the Nationwide policy is also built on universal life insurance, like the USAA LTC insurance offering. But one significant difference is that Nationwide includes a Cash Indemnity Benefit.
The Cash Indemnity benefit works like this:
Most long-term care policies provide reimbursement benefits. With reimbursement benefits, bills and receipts must be submitted to the insurance carrier for approval. The insurance company then reviews the claim and reimburses the exact amount of approved expenses, up to the amount of the monthly benefit.
No, Medicare does not cover long-term care (custodial care). This type of care makes up more than 90% of all long-term care services. Examples of custodial care is when you need help with walking, bathing, eating, dressing or using the toilet. This is what people need most when they have a physical impairment from a stroke. Or, due to cognitive impairment from dementia or Alzheimer’s disease. Don’t make the mistake of thinking Medicare covers long-term care costs. It doesn’t.
Further, about 80% of care at home is provided by unpaid caregivers. More than half of this care includes intensive caregiving assistance with personal care such as bathing or feeding.4 And it’s not only seniors that need long-term care. Over 35 percent of people currently receiving care are between the ages of 18 and 64.5
Like most advisors, we recommend buying long-term care insurance in your fifties or early sixties for the following reasons:
So it almost never pays to wait. And, while you’re waiting, you’re uninsured. If an accident or illness happens causing you to need long-term care, you’ll have to pay out of pocket.
Find out if your current health conditions will make it hard to qualify >
Your long-term care insurance rates will depend on your age, health history, plan design and type of coverage selected. The following choices let you choose how much protection is right for your situation: