A little-known insurance option can be an answer for some people who might need care but are unable to buy long-term care insurance. Short-term care insurance provides coverage for nursing home or home care for one year or less.
As long-term care premiums rise- short-term care insurance is gaining in popularity. This type of insurance is generally cheaper than its long-term care counterpart because it covers less time. Purchasers can choose the length of coverage they want- up to one year. According to the American Association for Long-Term Care Insurance– a typical premium for a 65-year-old is $105 a month.
People who can’t qualify for long-term care insurance because of health reasons may be able to qualify for short-term care coverage. This kind of insurance doesn’t usually require a medical exam and sometimes only has a few medical questions on the application. Another benefit of short-term care insurance is that there usually is not a deductible. The policies begin paying immediately- without the waiting period usually found in long-term care policies.
Short-term care policies are not the answer for everyone. They may not cover all the levels of care that a long-term care policy would cover. As with any insurance product- buyers need to make sure that they understand what coverage they are purchasing. And these policies are not regulated to the same extent that long-term care insurance policies are- so there are fewer consumer protections.
Short-term care policies may be beneficial for individuals who waited too long to purchase long-term care insurance (short-term care can typically be purchased up to age 89). They can also help fill gaps in Medicare coverage or cover the deductible period before long-term care insurance begins paying. The policies may also be appealing to single women because there is no price difference for women and men- as there is for long-term care insurance.
For more information, see this Forbes article about short-term care insurance policies.