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Long Term Care Insurance

Why do I need nursing home insurance?

This is an excellent place to start. Long Term Care Insurance is not the old nursing home policy that you may have heard of before. Long Term Care coverage is quite the opposite. While it does cover stays in qualified, licensed nursing facilities, the goal of the insurance company is to provide you with the ability to stay home. As with any insurance, Long Term Care policies from different companies have different features and benefits. Overall, the intent is to provide you with a level of care that can improve life for you and your family.

Will I use it?

70% of people over age 65 will require long term care services at some point in their lives.1 The national average cost of 1 year of nursing home care or 1 year of 24 hour home care is $75,000.2 If the weather report called for a 70% chance of rain, would you carry an umbrella? If you knew you had a 70% chance of your home burning down, would you make sure you had homeowner’s insurance coverage? If the average Long Term Care Insurance policy has a cost of $2,000 per year, you would have to pay 35 years of premiums to equal one year of benefit. And that scenario doesn’t include inflation, which the Long Term Care Insurance policy can cover.

My family will care for me.

One of the less discussed aspects of long term care is the health of the spouse or family member that is providing attention.  There is growing research that shows that the intense treatment that many require has a negative health effect on the family member providing care.  Additionally, with new technologies and techniques for care, they may not have the skill or training to provide the level of attention required.  When you consider that, Long Term Care Insurance provides the funds for the care of two people.

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1 U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information,, September 2008.

2 John Hancock Cost of Care Survey, conducted by CareScout, 2008.