With 70 percent of people over the age of 65 needing some form of long-term care in their lifetime, investing in long-term care insurance can be a helpful way to minimize future financial strain. Unfortunately, even the best long-term care insurance plans aren’t comprehensive—and you don’t want to be surprised by unsuspected holes in your coverage.
So, what isn’t covered under long-term care insurance? Here are five holes you should be aware of:
Pre-existing Conditions Aren’t Always Covered
Depending on your policy, care for a pre-existing condition may not be covered by your long-term care insurance. While supplemental insurance plans may easily solve this problem, it’s important to know what your options are.
Most Plans Don’t Cover Care by Family Members
Even if you’re counting on your family for help with your long-term care, there are still some expenses you’ll want to make sure are covered under your plan—such as memory care, or rehabilitation should you undergo surgery.
Different Plans Pay Out in Different Ways
Some plans cover a maximum dollar amount for long-term care, and some plans cover a maximum number of days requiring care. Plans are also often broken down into a maximum daily benefit amount. If you don’t have a clear understanding of how your coverage works, you could be in for a few unwanted surprises.
Types of Care are Not Necessarily Treated Equally
It’s entirely possible that your plan will cover five years in a nursing home or assisted living facility, but only two years of aging in place care. Depending on your long-term care plan, this is an important distinction to make.
Most Plans Have an “Elimination Period”
This refers to the amount of time you need to be receiving care before your long-term care insurance plan will kick in. While you can find plans with shorter elimination periods, they tend to come with higher premiums. You also will likely need to meet certain “requirements” for receiving long-term care, such as cognitive impairment or an inability to perform activities of daily living.
While you’re weighing the pros and cons of long-term care insurance, there are some alternative options you may also want to consider:
- Short-term care insurance: These policies typically offer a certain amount of long-term care coverage, but only for a shortened period of time, typically 180 to 360 days.
- Critical care insurance: These plans are designed for people who have been recently diagnosed with a serious illness—such as cancer—or experienced a serious health event, such as a heart attack or stroke.
- Continuing Care at Home Program (CCaH): These programs are designed to provide an alternative to long-term care insurance for older adults choosing to age in place.
If all of that seems overwhelming and confusing, don’t worry. The bottom line is this: You have options. Taking the time to fully understand available plans can help you prepare for the future and find the options that best suit your needs and lifestyle.