Long-term care protection pays for medical costs typically not covered by your health insurance policy or Medicare. Older individuals or those with a chronic or disabling condition may need nursing home care or home health services. These costs can be a significant strain on your finances. With long-term care protection, you may have options and flexibility for your care.

Here are some examples of what can be covered under a long-term care policy:

• Home care
• Adult day care
• Assisted living expenses
• Nursing home care
• Professional nursing care
• Occupational therapy
• Rehabilitation
• Respite or temporary care

Given the high chance of needing long-term care and the cost associated with long-term care, it’s important to consider long-term care protection.

A traditional long-term care insurance policy allows you to customize the coverage when you purchase it. For example, you get to choose the benefit amount of the policy, the daily or monthly benefit limit, and the initial lifetime limit. The benefits you choose determine the cost of the policy.

If you’re in good health and need affordable long-term care coverage, a traditional policy might be a suitable option for you. You can even pay for your coverage in installments versus having to make a lump-sum payment, and you can add additional protection as needed.

Asset-based long-term care protection, also called hybrid or combination policies, is another way to provide for your long-term care needs. With this type of policy, your long-term care protection is linked to an asset. This asset can be a whole life insurance policy, an annuity, money from your retirement account, or even the equity in your home.

With a traditional policy, there’s no way to recuperate the premiums if you don’t use them. With asset-based long-term care protection, the policy can pass to your heirs tax-free at the time of your death. You also have the option to cash out and surrender your policy. However, we don’t recommend doing this because you don’t know whether you’ll need long-term care coverage. 

A tax-qualified long-term care insurance policy also allows you to deduct the premiums on your tax return if you itemize your deductions. With asset-based long-term care policies, you typically make one lump sum payment instead of ongoing premiums. Finally, you can even add riders to your policy to make the benefits payable throughout your lifetime.

What Is the Average Cost of Long-Term Care Protection in Indiana?
The cost of a long-term care policy depends on several factors, including the age of the policyholder, the maximum annual coverage, and the lifetime maximum of the policy. According to a 2024 Genworth survey, the average cost for a long-term care event in Indiana is between $8,400 and $10,400 a month for nursing home care or $6,100 to $6,300 a month for in-home care.

Can I Receive My Care at Home?
Yes, you can. However, a long-term care policy will not pay your family members to provide at-home help for you. The person or company providing the in-home care services must be a licensed provider.

What Types of Long-Term Care Policies Are There?
There are traditional and asset-based long-term care policies. A traditional policy includes a fixed benefit for your long-term care needs. An asset-based policy is linked to an asset. Traditional policies are use-it-lose-it policies, while asset-based plans can provide benefits to the heirs if the long-term care benefits were not used up.

Where Can I Learn More About My Long-Term Care Protection Options?
Our team at the Airey Financial Group is ready to help you understand your long-term care protection options and how they fit into your overall financial plan.