Long Term Care

Long Term Care insurance assists employees with the cost of providing custodial care for chronic physical or mental conditions. LTC coverage can be offered to the employees’ family members, spouses, parents, grandparents and dependent children.

Typically, LTC policies provide benefits in the event of loss of two or more "activities of daily living" or ADLs. These ADLs consist of bathing, toileting, continence, dressing, eating, and transferring. Services covered by LTC plans include nursing home care, assisted living facilities, adult day services, home health care and respite care.

As shown in the following table, the probability of requiring such care is significant - greater than disability or premature death while employed. 

Source: The New England Journal of Medicine

Related Information

According to a recent survey by the International Foundation of Employee Benefit Plans, 80 percent of employers sponsor a voluntary, employee-pay-all LTC program. Unfortunately this survey also indicates that the take-up rate for these voluntary plans is less than 10 percent.

According to a study published by the American Council of Life Insurers, by 2030, the average annual cost of nursing home care is expected to exceed $190,000. Medicare coverage simply will not pay for most required services. LTC should be a consideration and part of sound financial planning.

Additional Resources

• "A Shopper's Guide to Long-Term Care Insurance" - State of Michigan
• National Clearinghouse for Long-Term Care Information - US Department of Health and Human Services
• "An Employer's Guide to Long-Term Care Insurance" - America's Health Insurance Plans (AHIP)