Coverage for care that health insurance doesn't cover.

Long-term care insurance covers services that help you with activities of daily living (ADLs) when you can no longer do them yourself due to aging, chronic illness, or disability. These activities include bathing, dressing, eating, toileting, transferring (moving from bed to chair), and continence. Coverage typically kicks in when you need help with 2 or more ADLs or have cognitive impairment like dementia.

Long-term care can be provided at home (by family or professional caregivers), in assisted living facilities, adult day care centers, or nursing homes. Costs vary dramatically by location and type of care—nursing home care can exceed $100,000 per year in many states. Medicare only covers short-term skilled nursing care after hospitalization, not long-term custodial care.

Without insurance, most people pay for long-term care out of pocket until they've exhausted their assets, then qualify for Medicaid. Long-term care insurance lets you preserve assets for your spouse and heirs, have more choice in where and how you receive care, and avoid burdening family members with caregiving or financial responsibilities.