An additional tool that may help you stay at home as you age is a long term care insurance policy. Many people do not have this kind of insurance, but if you do, it can be a very valuable resource. As with any insurance policy there will be a lot of variation from policy to policy.
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Typically, however, coverage under a long term care policy is triggered by an inability to perform two or more activities of daily living without substantial assistance from a third party. Activities of daily living include dressing, eating, transferring, toileting, and bathing. Once a triggering event occurs most policies will provide coverage for care in the community or in a long term care facility.
The amount of coverage will depend on the terms of your policy. Typically, the policy will have a long term care facility daily amount, a community based services daily amount, a maximum total amount that can be paid, and a stated number of years during which the insurance company is on the hook to make the payments. Most policies include an annual cost of living adjustment.
If your policy is a “partnership policy” it has the additional benefit of allowing you to protect an amount of assets equal to what the policy has paid over and above the basic Medicaid protected asset amount. As an example, a single person receiving Medicaid services can protect $1,600.00 in assets. If that person has a partnership policy that has paid $200,000.00 in long term care benefits, that person can protect $201,600.00 in assets. Some of the newer long term care policies also provide a death benefit if you die without having used up the long term care part of the policy.
Because of the diversity of available long term care policies you should consult with a planner who knows these insurance products. Consulting an elder law attorney about how a long term care insurance policy may interface with other long term care asset protection strategies also may be helpful.