Long-term care (LTC) is an umbrella term for various services which help meet both the medical and non-medical needs of people with a chronic illness or disability who cannot care for themselves for long periods.
Traditionally, long-term care was something an individual could expect to receive from their immediate family. Without modern medicine, the time period for which an individual would need this type of help was often limited, especially for the elderly and infirm who would find it difficult to combat potentially fatal diseases such as pneumonia.
As society changed, more and more people began to receive long-term care from caregivers outside the immediate family. In industrialized countries, nursing-homes were built to provide long-term care for individuals who could no longer tend to themselves. Still, the time spent receiving this type of care was often quite short – even in loving nursing-homes with devoted staff. Long-term care in a nursing-home was often seen as end-of-life care for the last two or three years of someones life.
Today, medical advances has made us live longer than ever. Worldwide, the average life expectancy at birth was 71.0 years (68.5 years for males and 73.5 years for females) over the period 2010–2013 according to United Nations World Population Prospects 2012 Revision. In 2012, life expectancy in the United States rose to 78.8 years – a record high for the country. The life expectancy for females was 81.2 years, while it was 76.4 years for males.
We live longer, and we are also able to survive longer even when struck with chronic illness or a disability that is serious enough to warrant long-term care. This means that we need to think more about how we can plan for a situation when we need long-term care. It is not longer a question of spending 2-3 years being cared for by family or living in a nursing-home. We could just as well find ourself in a situation where we live 10+ years relying on long-term care givers for our daily activities.
This is one of reasons why more and more people are looking into long-term care insurance as a way of making sure that they have funds to pay for the type of long-term care that they want, should they ever find themselves in a situation where long-term care is required. Even though tax-funded long-term care is available in many countries, it may not live up to the standard that you want, or it may only be available to individuals without financial assets.
The evolution of long-term care insurance
Prior to the early 1990s, long-term care insurance (LTCI) policies were often focused on paying for custodial care in a nursing home. Many of them had a requirement that said that the insured had to spend at least three days and three nights in a hospital fore the policy to kick-in, a requirement that made the policies rather undesirable considering how many elderly men and women that moves from their own home to a nursing-home without first having some sort of incident that is serious enough to warrant three days and nights in hospital.
To make the policies more appealing, insurers began to tinker with them and adapt them to the changing landscape of long-term care. The hospital-stay requirement is absent in most modern policies, and the insured can usually chose between several different types of long-term care. Gone are the days when custodial nursing-home care was the only choice.
Here are a few examples of long-term care options covered by many LTCI policies:
- Assisted living housing
- Specialized Alzheimer’s group-home care
- At-home care, with or without home modification
- Adult daycare
- Respite care
Another major change when it comes to LTCI has to do with legislation. As more and more countries and states are offering various tax incentives to encourage people to get long-term care insurance, it has become increasingly important for insurers to keep up and make sure they have policies available that tick all the boxes required in order to provide the insured with best possible tax treatment.