Why Long-Term Care Insurance Matters More Than Ever
Long-Term Care Insurance is a growing topic of interest, especially among Baby Boomers, and for a very good reason. As life expectancy continues to rise, the demand for long-term care services increases accordingly. In 1970, when Long-Term Care Insurance was introduced, the average life expectancy was seventy years. Today, that number has grown to seventy-nine years as of 2023, reflecting advancements in medical care, nutrition, and healthier lifestyles. The Pennsylvania State Healthcare Association reports that more than 70% of people currently turning 65 will require long-term care at some point in their lives. On average, individuals will receive care for approximately three years, and 18% of all Seniors are expected to spend more than one year in a skilled nursing facility—often resulting in significant financial and emotional strain for families.
Originally, Long-Term Care Insurance only covered expenses in Nursing Communities, as Assisted Living facilities did not emerge until the 1980s. In today’s healthcare landscape, the scope of coverage has expanded significantly to accommodate diverse senior care needs. Depending on the policy, portions or all of the costs associated with Assisted Living, Memory Care, or Nursing Home stays may be reimbursed after an elimination or waiting period has been satisfied, helping families manage what can otherwise become overwhelming financial burdens.
To qualify for benefits, specific conditions must be met. Generally, assistance is needed with a set number of the six recognized Activities of Daily Living (ADLs): personal hygiene, continence, dressing, eating, toileting, and transferring. Coverage typically requires the policyholder to reside in an Assisted Living, Memory Care, or Long-Term Care Community. However, some policies extend coverage to home care services. Approval for coverage is determined through a review by the insurance provider.
Long-Term Care Insurance policies are not uniform—coverage duration and benefits vary. Some plans may cover services for the remainder of the insured’s life, while others have a predefined term or monetary limit. Reimbursement amounts depend on both the issuing company and the date of policy purchase, as well as the specific features selected at the time the policy was written, such as inflation protection or daily benefit limits.
A common misconception is that Medicare will cover Assisted Living costs. The reality is quite different. Medicare offers only short-term coverage in a Nursing Facility and only if the individual is undergoing rehabilitation following a qualifying hospital stay. Once that limited coverage period ends, families are responsible for expenses, either privately, through supplemental insurance, or with long-term care coverage if previously arranged.
While Long-Term Care Insurance can be expensive, it often proves to be a wise investment. A 2022 price survey by the American Association for Long-Term Care Insurance found that a 55-year-old male could expect to pay an annual premium of $2,220, with optional increases of 3% or more to match inflation. If that policy is paid for over 20 years, the total cost could be reimbursed within a single year of Assisted Living residency. Considering the potential for increased care needs with aging, this type of insurance can provide peace of mind and financial protection. There are three primary types of Long-Term Care Insurance, each with its own benefits and limitations. A conversation with a qualified financial advisor can help you identify the best policy for your needs.
Bridge to Better Living understands that financial decisions can be complex and deeply personal. Our commitment, expressed in our motto Placement with Passion®, drives us to find the most suitable Senior Living Community for each client—medically, socially, physically, and financially. Best of all, our services come at no cost to the client. Contact Bridge to Better Living today and let us support your transition with confidence and care.