Define long-term care insurance and describe its basic features

What will be an ideal response?

Answer: Long-term care insurance pays for nursing home expenses and home health care. These plans protect you from the high costs of hiring someone to take care of you in a nursing home or at your own home. Carefully shop around because these types of policies are laden with exceptions and conditions to meet. Most policies require you to be unable to perform one or more "activities of daily living" without assistance. Consider only policies that cover Alzheimer's and Parkinson's disease.

The basic features include:
1. Investigate the type of care. Check to see if you are covered in a nursing home only or if the insurance extends to home care, adult day care, and hospital care.
2. The length of the benefit period is important, especially for women who live longer. Get a minimum of three to six years of coverage when taking out the policy.
3. The cost of the waiting period varies with the length. Take as long of a period as you can afford — at least 100 days.
4. Be sure to include an inflation adjustment provision to cover the rising future costs.
5. The waiver of premium lets your insurance company pay for the premiums while you are receiving benefits. This is optional and is too costly to be included in general.