Long-term care (LTC) insurance provides financial aid for covered individuals who need medical, personal, custodial, and social services during long illnesses and disabilities. LTC includes an array of services ranging from nursing home care, skilled home health care, adult day care, unskilled home personal care, and respite care. Alternatives to group LTC insurance for paying or providing for these services include individual policies, personal savings, accelerated life insurance benefits, Medicare, Medicaid, and care by family members.
However, all these alternatives have drawbacks. For example, such alternatives may be expensive (individual policies and personal savings), provide limited coverage (Medicare), be open only to individuals with extremely limited financial resources (Medicaid), be available only to terminal individuals (accelerated life insurance), and be an extreme physical and psychological drain (family member assistance). Attempting to juggle these various alternatives puts a strain on active employees and results in indirect costs to employers because of reduced efficiency and absenteeism, increased healthcare costs, and higher turnover.