How To Prepare For Long Term Care

The Animated Adviser: How To Prepare For Long-Term Care


In this installment of The Animated Adviser, Senior Financial Planner Vanessa Carter-Witt covers important information on long-term care insurance. LTC insurance can protect you, your family and your legacy from debt related to your care. If you are planning for the future of your long-term care or considering long-term care insurance companies, here’s what to keep in mind:

  1. Daily or Monthly Benefits. This determines how much the insurance company will pay out based on your policy. How much long-term care coverage you need depends on your location and what kind of coverage you’re looking for. Typically, a private room could cost upwards of $100,000 a year for a nursing facility and $50,000 a year for assisted living. If a policy covers less than $50,000 per year, you may want to bump up your coverage.
  2. Benefit Period. The long-term care benefit period is the amount of time a LTC policy will provide coverage. The average nursing home stay for a man is about three years and the average for women is about four years. You want to have a benefit period that is at least that long.
  3. Payout Options. The payout options for long-term care are how you are paid by the insurance company. In the case of LTC, your choices are indemnity or reimbursement. With indemnity insurance, the company pays you an agreed upon daily or monthly benefit regardless of your actual long-term care expenses. (In this case, you may end up receiving more or less from the policy than your actual cost of care.) The other option is reimbursement. With this choice, you provide receipts to your insurance company and they will reimburse you for your incurred expenses. This option is typically much cheaper than indemnity.
  4. Elimination Period. The elimination period of long-term care insurance is how long you have to wait for policy benefits to begin. We recommend searching for elimination periods under 90 days, otherwise you may pay much more out of pocket.
  5. Inflation Rider. Average nursing home costs rose 66% in the last 18 years. Assisted living costs rose 88% in that same period.  If you’re purchasing a long-term care policy while you’re young, be sure to check if your benefits include inflation protection.

There are many nuances to long-term care coverage. If you have questions about your specific situation, please contact Vanessa at

For informational purposes only. Our statements and opinions are subject to change without notice. Always consult a professional regarding your specific situation.  Insurance information is general in nature; and is not to be construed as personalized advice. Adviser Investments, LLC is not licensed to sell insurance products. Tax information that may be contained herein is general in nature, is provided for informational purposes only, and should not be construed as legal or tax advice.