Is nursing home insurance offered by companies? Is it offered in a long-term care policy? If so, what is usually covered in long-term care policies?

Long-term care insurance (LTCI) is really “nursing home insurance”. The accurate term is nursing home insurance because LTCI usually covers a lot more than just nursing home care. Many consumers don’t understand exactly what LTCI covers because it is a relatively new insurance product. LTCI is offered in many insurance companies today. An important aspect of a complete long-term care policy includes nursing home care; however, it isn’t the only reason for purchasing long-term care insurance. It is important to choose a policy that will cover the types of care you need because most long-term care is provided outside the nursing home setting.

Adult day care, respite care, home health care, assisted-living care and other types of care might be covered under a comprehensive LTCI policy. You are usually asked to choose the amount of coverage you want when purchasing a LTCI policy. Some LTCI policies offer “pooled benefits” meaning that the policy provides a total dollar amount that may be used for various types of long-term care services. Pooled benefits include a daily, monthly, or weekly limit on covered expenses.

LTCI policies also offer “per diem benefits” which provide a certain dollar amount for each day of care ranging from $40 to $300 per day. You will also be asked to the length of time the benefits will be paid which is considered a benefit period. Policies have different benefit periods with different type of care. For example, a policy might offer two years of assisted living coverage and five years of nursing home coverage. LTCI premiums are higher for policies with larger benefit amounts and longer benefit periods.