This blog post is designed to provide general information on the subjects covered. It is not, however, intended to provide specific estate planning, insurance, tax or legal advice. Please note that LTC Consumer and its representatives do not give financial planning, tax or legal advice. You are encouraged to consult with your tax advisor or attorney concerning your own situation.

The Difference Between Long Term Care Insurance and Disability

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It’s difficult to master all the different types of insurance coverages. What’s even more challenging is knowing what risks one insurance covers versus another!

You may think you’re protected by taking out an insurance policy in one line of coverage only to discover it doesn’t cover all your risks.

For example, consider long term care insurance versus disability insurance. These are two very different insurance coverages, but can be easily confused.

Here we’ll explain what these insurance coverages offer and how they’re different from each other. It’s important to educate yourself now so you’re not exposed to greater risks later when you thought were covered.

What is Long Term Care Insurance?

Long term care insurance covers the cost of home care, assisted living, or nursing home care when you need care for an extended period of time.

You’re eligible for benefits after an elimination period (typically 90 days) when your doctor confirms you can’t do two out of the six Activities of Daily Living (i.e. eating, bathing, dressing, transferring, toileting, or continence). You’re also eligible for coverage if you’re cognitively impaired due to Dementia or Alzheimer’s.

Keep in mind, long term care insurance isn’t only for old age. If you experience an accident (i.e. skiing accident, car accident, etc.) or an illness that makes you unable to care for yourself, you may access your long term care benefit to pay for your care.

Personal home care or facility care is expensive. Long term care insurance protects your assets by covering your risk and offers peace of mind during difficult emotional and financial times for families.

What is Disability Insurance?

There are two main types of disability insurance: Short-Term Disability and Long-Term Disability.

Disability insurance may be available through your employer or purchased on your own if you are self-employed. This coverage protects your income if you are unable to work due to an injury or illness.

Short-term disability has a shorter elimination period (around 7-days) and lasts for a limited number of weeks. Long-term disability has a longer elimination period (around 90-days) and may last until Social Security Retirement Age.

It’s important to review the details of your policy to determine the exact elimination period, duration, and percentage of your income covered on a weekly or monthly basis.

So, How Are They Different?

The main difference between long term care insurance and disability insurance:

  • Long term care insurance protects your assets from the financial burden of a long term care event.
  • Disability insurance protects your income in the event you can no longer work due to a disability or illness.

Long term care insurance does not pay your mortgage, electric bill, food, etc. Disability insurance can cover any of your expenses, but on a reduced income, long term care services may not be affordable.

As you consider retirement, it’s important to protect your family and assets from the financial burden a long term care event. To learn more about how long term care insurance can protect you, get an instant quote and speak with an LTC Specialist today.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

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