Long term care insurance pays a benefit when someone cannot physically take care of himself or herself. The benefit is used to pay for expenses related to home health care, skilled nursing care, intermediate care, or custodial care. Tax qualified long term care insurance policies must pay benefits based on the insured’s need for assistance with the two or more of the following activities of daily living:
- using the toilet
- transferring (to or from bed or chair)
In addition, dementia is a trigger for benefits in a qualified long term care policy.
Most long term care policies pay benefits to reimburse actual expenses, although some available policies pay benefits regardless of actual expenses.