What do long-term care insurance policies cover?

Long-term care services are provided when a person cannot perform certain "activities of daily living" (ADLs), or is cognitively impaired because of senile dementia or Alzheimer's disease. Most commonly the ADLs used to determine the need for services include bathing, dressing, transferring (getting from a bed to a chair), toileting, eating, and continence.

Today's policies cover skilled, intermediate, and custodial care in state-licensed nursing homes. Long-term care policies usually also cover home care services such as skilled or nonskilled nursing care, physical therapy, homemakers, and home health aides provided by state-licensed and/or Medicare-certified home health agencies.

Many policies also cover assisted living, adult daycare, and other care in the community, alternate care, and respite care for the caregiver.

"Alternate care" is nonconventional care and services developed by a licensed health care practitioner that serve as an alternative to more costly nursing home care. Benefits for alternate care may be available for special medical care and treatments, different sites of care, or medically necessary modifications to the insured's home, like building ramps for wheelchairs or modifications to a kitchen or bathroom. A health care professional develops the alternate plan of care, the insured or insurer may initiate the plan, and the insurer approves it.

You should know that the benefit amount paid for alternate care would reduce the maximum or lifetime benefit available for later confinement in a long-term care facility. Policies may limit the expenses covered under this benefit (for instance, 60 percent of the lifetime maximum limit).

Alzheimer's disease and other organic cognitive disabilities are leading causes for nursing home admissions and worry for many older Americans. These conditions are generally covered under long-term care policies.