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What does long term care insurance cover?

Long-term care (LTC) is a range of services that provide health and personal care for individuals who are unable to care for themselves. These services can be provided in the individual’s own home and include part-time skilled nursing care, practical nursing assistance, the services of a nurse’s aide, physical or occupational therapy, and homemaker assistants. Or they can be provided by chronic care hospitals, nursing homes, adult day care centres, retirement lodges, community care access centres, home care visitations, and also by family and friends. Long-term care insurance provides the insured with a source of funds to pay for these services

Eligibility for benefits is measured on the basis of the insured’s ability, or inability to perform the usual activities of daily living (ADLs). The ADLs considered are bathing, dressing, mobility, continence and eating. Requirements vary from company to company with regard to how the ADLs are evaluated, however, if the insured was unable to bath or dress themselves, they would most likely qualify for LTC benefits.

The annual premium for long-term care policies with reasonable inflation protection features can be in excess of $2,000 for a 65 year-old. Premiums are lower for those who are younger. At age 75, the premiums can be two and a half times greater than if the policy was purchased at age 65 and six times higher than if bought at age 55.