Long term care insurance is one way to protect individuals and couples from the cost of a potential nursing home stay. In short, long term care insurance provides policy holders with a certain amount of coverage in case of a future nursing home stay in exchange for monthly premiums.

However, having a long term care insurance policy is not a be all and end all substitute for planning for potential nursing home costs.

The coverage of long term care insurance can be limited in a number of ways. First, a long term care insurance policy may not fully cover the cost of a nursing home stay. Most policies provide coverage by covering costs up to a certain amount per day or month. What looks like an adequate daily or monthly benefit now may still leave individuals paying significant out of pocket costs when they enter a nursing home in the future. While there are policies that adjust the benefit amounts to keep up with inflation, these policies are significantly more expensive in terms of premiums.

The other potential major limitation of long term care insurance is the length of coverage provided. While most policies will cover the average nursing home stay, if an individual finds themselves needing a longer term stay, they may find that they reach their policy’s lifetime limit, or maximum benefit period. Once the benefit period is exhausted, the policy no longer pays any of the cost of further nursing home care.

Due to these potential limitations, people with long term care insurance policies should still meet with an experienced elder law attorney to plan for potential nursing home costs. An elder law attorney can develop a plan that can protect an individuals assets for an individual and their family while still providing coverage for potential nursing home costs.

It is important to plan sooner rather than later because by the time that individuals are already in a nursing home and facing significant out of pocket costs, even with a long term care insurance policy, their planning options to further protect assets are much more limited.

To discuss questions about how long term care insurance fits into a broader estate plan, please call Martha C. Brown & Associates at (314) 962-0186.