Long Term Care Insurance (LTCI) is one of the most misunderstood and sometimes feared forms of insurance being offered in America today. Like many senior care issues, LTCI can be an obscure and unsettling topic. We may know that we need to provide for our future care needs, but uncertainty about the future can leave it less than clear that we have done the right thing. A review of the common misunderstandings and outright falsehoods surrounding LTCI can clarify what LTCI is and what it is not.

The first misconception is that LTCI is Nursing Home insurance. While most LTCI plans anticipate nursing home care, the major objective of LTCI policy ownership is to provide a means to stay out of a nursing home for as long as possible. LTCI specifically provides benefits for custodial types of care that many, if not most of us, will likely need at some point in our lives. Activities of Daily Living (ADLs) such as getting up and around without assistance, going to the bathroom, taking a bath, or even getting dressed every day can be impaired as a result of injury, illness, or the irreversible effects of aging. Money to pay for assistance with these ADLs is what LTCI is all about. According to a study prepared by LifePlans for the Robert Wood Johnson Foundation, more than 60% of those collecting home care benefits from their polices say that without LTCI, they would be in a facility instead of their own home. A properly designed LTCI can make options to nursing home care practical, available, and affordable.

For those of us who have not already experienced first-hand the costs of contemporary long-term care, the money involved can be startling. Geographic location and individual needs affect each situation, but a cost of $200 per day (nearly $6,000 per month and somewhere around $72,000 per year) is typical. And for how many years? Advances in medical technology have added to the human lifespan, but have also introduced us to a growing list of chronic, disabling conditions. Diseases such as Alzheimer’s and Multiple Sclerosis have changed how we think about end-of-life issues. Conditions and circumstances that are unforeseen today may require us to seek assistance, on a temporary or a permanent basis.

Some cherished beliefs may stand in the way of making a clear decision about LTCI. One of these is that Medicare and other coverages can adequately meet our long term care needs. While Medicare, Medicare Supplements, Disability Insurance, Health Insurance, Cancer Insurance, etc., may provide some benefits for those who incur conditions which result in needing custodial care, the reality is that none of these forms of coverage is designed to provide benefits for long term care needs. One should only expect about 10% of custodial care costs to be covered by insurance policies other than LTCi.

Another cherished ideal is that our loved ones will be available and able to care for us in our time of need. This sentiment may be noble, but rarely is it practical. Our families are spread far and wide; most of us are already so busy that arranging for a few days or weeks away for pleasure is difficult enough. To expect a spouse or child to give up their lives, jobs and other obligations to perform duties that they have no training to perform really is not practical. Have those individuals been consulted and consented to this obligation?

Given the natural uncertainty involved in contemplating the end of life, it is understandable that some people choose to behave as though long term care is a service they will never require. This, too, is a careless belief, born out of a lack of information. Statistics on how many people require long term care are incomplete, and sometimes reported on in an alarmist tone; but studies do indicate that nearly one out of every two people currently at age 65 will need custodial care before death.

It is interesting to contrast the case of LTCI with that of other insurance coverages we purchase with little or no hesitation. Auto insurance and homeowner’s coverage immediately come to mind. We may grumble a little about the cost of a policy, but few would feel comfortable without a good policy from a quality carrier. Yet when we look at the numbers involved, coverage for a car seems almost ludicrous in comparison to coverage for a long term care risk. As you may recall, we discussed earlier that the cost of just one year of long term care, a risk that may hit 50% of the population, is probably near $72,000. The chances of needing to completely replace a $20,000 vehicle are slim at best.

Compared to other kinds of insurance that we purchase as a virtual necessity, LTCI addresses a future risk that we are much more likely to face. Still people may hesitate on the basis of price. Many feel that the premium is too high since they are so rarely exposed to the realities of the costs associated with long term care. Like virtually any insurance policy, when the time comes to be a recipient of the benefits, the cost of the premium suddenly becomes a bargain.

Finally, and not without reason, many balk at the prospect of LTCI because they find the policy language vague, or find the agent behind the proposal less than clearly informative about the benefits of LTCI. We have little exposure to the specific nature of LTCi policy design and language, so many feel that the discussion with an insurance agent is confusing gibberish. The solution is to seek the advice of truly qualified insurance professionals who offer LTCI from quality carriers. Many agents are just as confused as their clients about the topic of long term care. There is, however, a growing number of insurance agents being trained and exposed to the realities of LTCI.

Is there a solution to any of the concerns outlined above? Where can anyone turn to get the truth about the risks, costs and options when it comes to investigating LTCi? The best advice is to not simply ignore the subject. As many LTCi specialists will tell you, they end up spending a lot of time talking to those who are interested in purchasing long term care when it is too late. Like all insurance, one must be able to qualify for the coverage. The process of Underwriting for LTCi is tricky when health challenges already exist. Further, like nearly all other insurance, the younger you are when you buy, the more affordable it can be. The best suggestion would be to act, without fear, and without fail.