Long term health care insurance is a supplemental insurance policy that transfers the risks of aging and illness to an insurance company. Long term care insurance is meant to help you over a long period of time. It goes beyond medical and nursing care you find in hospitals to care you can expect in your home or in a facility (like assisted living or extended care facility, also known as a nursing home).
Long term care needs might include such services as adult day care, meals-on-wheels or home delivered meal services, home health aides, chore services, visiting nurses or even respite services for caregivers. Long term insurance policies may pay for some of these services depending on the type of policy you have.
Long term care insurance is considered an important financial planning and asset protection tool. The average cost of long term care in 2007 was $70,000 a year. When a retiree or retired couple is faced with these types of costs they can quickly lose their lifestyle and security. The purpose of long term care insurance is to transfer financial risk away from the consumer to the insurance company.
Long term care insurance is a complicated contract and needs to be understood completely before purchasing. According to an article at Lawyers & Settlements LTC insurance carriers (companies) have collected more than $50 billion dollars in premiums. When you have this much money at stake you – as the consumer – have to be very careful about what you do, the contracts you enter, and what you believe