Long-term Care Insurance (LTCI) covers extended personal care. LongTermCare.gov is a comprehensive site with resources to learn about traditional LTCI and to navigate by age and special situation. For information on different types of LTCI click here.

People buy LTCI to pay for the physical assistance they or someone else will need later in life. It comes up during the family years, if not before, when a parent, child, or both need care. Doing that for both at once can derail a career. Later in life if both you and your spouse need care, that’s a problem too.

LTCI is triggered by inability to do 2 or more of 6 activities of daily living (ADLs); bathing, dressing, eating, transferring, toileting, and continence. Its purpose is to help pay for long-term custodial care. There are eight additional Instrumental ADLs (IADL) to address more complicated tasks. Both are used to determine a person’s ability to live independently.

Things to remember:

1. The cost of LTCI increases with age, and certain health conditions will disqualify you.

2. By your 60s, qualifying for, and the expense of, traditional LTCI may preclude it.

3. Don’t buy more than you need, learn about your alternatives first.

4. If you use traditional LTCI confirm you can pay the premiums until you need to use it.

5. Not all LTCI policy premiums qualify as medical expenses (see IRS document page 11). 

The policy can only cover LTC services to qualify.

6. Although the deductible amount increases with age, it’s unlikely to fully offset the premium.

7. All the services a LTCI policy covers are qualified medical services that an HSA can pay without triggering tax consequences.