Long-term care insurance is a specific type of insurance product that helps people cover the cost of long-term care beyond a predetermined period. But it’s not the only way to pay for in-home care, adult day care, assisted living or a nursing home.
Short-term care insurance is an alternative to long-term care insurance that provides good coverage for those in need of long-term care. Not only are they less expensive, but they may also be available to older seniors or those who aren't otherwise eligible for long-term coverage. Short-term care insurance policies (also known as recovery care or convalescent care policies) will offer between $50 to $300 per day of long-term care coverage for 180 to 360 days. You choose the period when you buy.
People who find themselves priced out of the long-term care insurance market or ineligible for health reasons may be able to get short-term care insurance coverage. Since the premiums for this kind of insurance are lower and the coverage is usually only for a year or less, many applicants who are rejected by traditional long-term-care coverage may be accepted by short-term care insurance. Another benefit of short-term care insurance is there generally is no “elimination period,” or waiting period, so the policy starts paying out as soon as you start using care. In fact, the majority of policies begin paying out immediately.
A short-term care insurance policy won’t provide enough coverage if you need care for more than a year. The brevity of the insurance coverage makes it only a short-term solution to long-term care coverage. It might make more sense to save money for several months of care than to pay year after year for a short-term care policy. And less regulation means fewer guaranteed consumer protections.
Short-term care policies may be beneficial for individuals who were declined for traditional long-term care coverage. They can also pay for care during the elimination period of a long-term care insurance policy. As with any insurance purchase, research companies carefully.
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