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What Is Long-Term Care Insurance?: Page 7

By , Caring.com senior editor
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Anyone between the ages of 18 and 84 in reasonably good health can purchase long-term care insurance, according to the HIAA. People over the age of 84 aren't usually eligible to buy new policies.

Many people can't buy long-term care insurance, however, because they are rejected due to pre-existing health conditions. The Insurance Information Institute reports that in 2003 to 2004, 11 percent of people in their 50s, 19 percent in their 60s, and a whopping 43 percent of people in their 70s had their long-term care insurance applications rejected.

If one or both spouses don't qualify for long-term care insurance because of health or age, some other insurance products -- though not new insurance policies -- are available that can help with the costs of long-term care. For example, viatical settlements, in which an older adult sells his life insurance for roughly the present value of the policy, can help fund long-term care. This type of product has some eligibility limitations, and the money obtained from selling the policy is taxable.

Life insurance policies may also offer something called an accelerated death benefit (ADB), which offers cash advances against the value of the policy while the affected person is still alive. These policies have some drawbacks -- you have to continue paying the insurance premium, and the policies can generally be used only if the insured person has a terminal illness, needs nursing home care permanently, or can't perform normal daily activities.