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Extended Care Insurance

Extended Care Insurance, also known as Long-term Care Insurance, is a type of insurance that helps cover the costs of long-term care services such as nursing home care, home health care, and assisted living facilities. It provides financial protection against the high costs of long-term care services, which are often not covered by standard health insurance plans. Innovative Senior Benefits service offers a range of insurance products, including short-term and long-term care insurance, to help seniors plan for their healthcare needs and protect themselves against unexpected healthcare costs. These products are customizable and provide flexibility in choosing the coverage that best meets the individual's needs and budget. The service also provides access to additional resources such as care coordination and eldercare resources to help seniors manage their healthcare more effectively.

(Long-Term Care)

To be considered tax-qualified, the insurance policy must meet certain requirements set by the Internal Revenue Service (IRS). These requirements include specific coverage provisions, limitations on benefit amounts, and inflation protection options. The premiums paid for tax-qualified long-term care insurance are tax-deductible up to certain limits based on the age of the policyholder. Additionally, benefits paid out under the policy are generally tax-free. Tax-qualified long-term care insurance can provide individuals and families with financial protection against the high costs of long-term care services, while also providing tax benefits. Tax-Qualified plans usually fall under the phrase "Long Term Care Partnership Program"

Non-Tax Qualified
(Short-Term Care)

Non-tax-qualified short-term care insurance is a type of insurance policy that covers the costs of short-term care services, typically for a period of up to one year. Unlike tax-qualified long-term care insurance, non-tax-qualified short-term care insurance does not meet certain federal requirements for tax benefits. This means that premiums paid for the policy are not tax-deductible, and benefits received from the policy may be subject to income tax. Non-tax-qualified short-term care insurance policies are typically less expensive than long-term care policies and may be more accessible to those who cannot afford long-term care insurance or do not qualify for tax benefits. These policies can provide individuals with some financial protection against the costs of short-term care services and help them plan for unexpected healthcare expenses.

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Why get Extended Care Insurance?

There are several reasons why someone may choose to get extended care insurance:

  1. Financial Protection: Long-term care services can be very expensive, and standard health insurance plans often do not cover the full cost of these services. Extended care insurance can provide financial protection by covering the costs of long-term care services such as nursing home care, home health care, and assisted living facilities.

  2. Peace of Mind: Knowing that you have extended care insurance can provide peace of mind that you will be able to afford the care you need if you experience a chronic illness or disability.

  3. Independence: Extended care insurance can help individuals maintain their independence by providing coverage for home health care services, allowing them to receive care in the comfort of their own home.

  4. Protecting Retirement Savings: Paying for long-term care services out of pocket can quickly deplete retirement savings. Extended care insurance can help protect retirement savings by covering the costs of long-term care services.

What does Extended Care Insurance Cover?

Extended care insurance typically covers the costs of long-term care services, which can include:

  1. Nursing Home Care: Coverage for nursing home care typically includes room and board, meals, medical care, rehabilitation therapy, and personal care.

  2. Home Health Care: Coverage for home health care typically includes skilled nursing care, physical therapy, occupational therapy, speech therapy, and personal care.

  3. Assisted Living Facilities: Coverage for assisted living facilities typically includes room and board, meals, medical care, rehabilitation therapy, and personal care.

  4. Adult Day Care: Coverage for adult day care typically includes social activities, meals, and some medical services.

  5. Hospice Care: Coverage for hospice care typically includes medical and personal care for individuals who are terminally ill.

Extended care insurance may also offer additional benefits such as caregiver support services, respite care, and care coordination services to help individuals and their families manage their care needs. However, it's important to review the policy details carefully to understand what services are covered and any limitations or exclusions.

How do you Qualify for the Benefit?

To qualify for benefits under extended care insurance, you typically need to satisfy an Elimination Period, which is a waiting period before benefits begin, and meet certain requirements outlined in your policy. These requirements usually include a certification from a Licensed Health Care Practitioner that you need help due to either:

  1. Inability to perform at least two Activities of Daily Living (ADLs) without human assistance or supervision. ADLs include bathing, eating, continence, toileting, dressing, and transferring.

  2. Suffering from Cognitive Impairment and requiring substantial supervision. This can include conditions such as Alzheimer's disease or dementia.

Once you meet these requirements, the insurance company will begin paying out benefits according to the policy terms. It's important to review your policy carefully to understand the specific requirements and limitations of your extended care insurance plan.

How much does Extended Care Insurance cost?

The cost of extended care insurance can vary widely depending on several factors, such as:

  1. Age: The younger you are when you purchase a policy, the lower your premiums are likely to be.

  2. Health: Your current health status and medical history can impact the cost of your policy.

  3. Coverage Amount: The amount of coverage you select will affect the cost of your policy.

  4. Elimination Period: A shorter elimination period will generally result in higher premiums.

  5. Benefit Period: A longer benefit period will generally result in higher premiums.

  6. Insurance Company: Different insurance companies may have different pricing and underwriting guidelines.


According to the American Association for Long-Term Care Insurance, the annual premium for extended care insurance can range from several hundred to several thousand dollars, depending on the above factors. However, the alternative would be Short-Term Care that might be more cost effective to you. It's important to shop around and compare policies from different providers to find a policy that fits your needs and budget.

Extended Care Insurance Terminology:

Here are some common terminology related to extended care insurance:

  1. Activities of Daily Living (ADLs): Basic activities that individuals must be able to perform to care for themselves, such as bathing, dressing, eating, toileting, transferring, and continence.

  2. Cognitive Impairment: A condition that affects a person's ability to think, reason, and remember, such as Alzheimer's disease or dementia.

  3. Elimination Period: The amount of time you must wait before your insurance coverage begins to pay for your care.

  4. Benefit Period: The maximum length of time for which the policy will pay benefits.

  5. Benefit Amount: The maximum dollar amount of coverage provided by the policy.

  6. Inflation Protection: A feature that adjusts the policy's benefit amount to keep up with inflation.

  7. Nonforfeiture Benefits: A feature that allows you to receive a reduced benefit if you stop paying your premiums.

  8. Waiver of Premium: An optional feature that can be added to an extended care insurance policy that waives the policyholder's premium payments if they are receiving benefits.

  9. Caregiver Support Services: Resources and services that can help support caregivers, such as support groups, counseling, and respite care.

  10. Respite Care: Temporary care provided to give the primary caregiver a break.

  11. Skilled Nursing Facility: A facility that provides 24-hour nursing care for individuals who require medical care and supervision.

  12. Home Health Care: Care provided in your own home by a healthcare professional, such as a nurse or physical therapist.

  13. Long-Term Care Insurance Partnership Program: A program that combines private insurance with Medicaid to provide extended care coverage.

  14. Hybrid Policy: An extended care insurance policy that combines the features of long-term care insurance with life insurance or annuities.

  15. Pre-Existing Condition: A health condition that existed before you applied for insurance coverage.

  16. Underwriting: The process used by insurance companies to determine your eligibility for coverage, based on your health status and other factors.

  17. Underwriting Class: The risk category that an applicant is placed in based on their health and other factors. A higher risk class may result in higher premiums or denial of coverage.

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