Although the benefits of long-term insurance are often discussed in many online and printed publications, most Americans have little knowledge on how this type of insurance exactly works and how long term care cost can affect them.

Statistics shows that more and more people in the United States are requiring long term care services every year. According to numerous studies, the probability of a spouse needing long-term care is 70%, while single individuals are 40%. A research made by the U.S. Department of Health and Human Services shows that about 40% of Americans aged 65 and older have about 50% risk of entering a nursing institution. Meanwhile, the Health Insurance Association of America estimates that 12 million people may require long term care by the year 2020.

What is long-term care insurance?

For the unacquainted, long term care insurance is a type of insurance policy that provides benefits for people who are chronically ill and need medical attention over a long period of time. When you buy long-term care insurance, you buy benefits that can be used for various services such as hospice care, respite care and home care.

Contrary to popular belief, it doesn’t only cater to the elderly or senior citizens. One may require long-term care if he is involved in a fatal accident or has a non-terminal illness that does not allow him to live self-reliantly and needs support with the normal activities of daily living.

What are the policy features and benefits?

Insurance policies vary in the type and amount of coverage provided. Most long term care policies cover nursing home care and services related to mental impairment and memory loss, including conditions such as Alzheimer's disease. Also, policies can cover home and community-based services, including adult day care and at-home care.

The benefits are usually expressed in the daily benefit amount and the period ahead. The daily amount refers to how much the policy will pay on a daily basis for facility-based care. A weekly or monthly benefit may also be available for home-based adult care.

How can you save money on long term care insurance?

Like other types of insurance, it helps a lot to pay for only the most serious or likely circumstances. Take note that there are different factors that affect long term care cost or the amount of insurance premiums. One of them is the elimination period. It is basically the deductible or the number of days a policy holder is entitled for the services. In general, the longer the elimination period, the cheaper the policy, and vice versa. Most companies have the best deals for 90-day elimination periods. A policy with anything longer than 90 days, although much less costly, may not save you much for the extra risk you take on. Also, the younger the policy holder when he purchases the insurance, the lower the long term care cost becomes.

Long term care insurance can be very expensive, but it is an investment that will benefit the policy holder in the long run. This insurance can protect an individual and his family against extended medical expenses during retirement.