What’s the Difference Between Cancer Insurance and Long-Term Care Insurance?

Dear Toni,

I applied for a long-term care insurance policy but was denied due to having a pacemaker installed in January. The agent who presented the LTC plan suggested that I apply for cancer insurance to help with out-of-pocket costs. 

I had not applied for long-term care before because I don’t turn 65 until this October. Well, now I am discovering that waiting until I was older was not a good idea. Can you please explain the difference between cancer insurance and long-term care insurance?

Thank you, Leonard, from Tampa, FL

Hello Leonard,

At the Toni Says® offices, I am noticing an increase in issues with long-term care, because many are waiting until retirement, long past 65, to apply for a traditional long-term care policy. By then, the premium is unaffordable for their retirement budget, or they cannot qualify due to health issues. 

It is important for Americans to begin searching for long-term care insurance when they are turning 50, so that the premiums are more affordable, and the plan can grow with at least a minimum of 3% compounded lifetime inflation factor.

The cost of nursing home care is projected to rise drastically from an average yearly cost of $115,000 in 2023 to more than $207,000 in 20 years. The average cost of assisted living, which is less expensive than nursing home care, is approximately $57,000 per year and is projected to rise in 20 years to about $103,000 per year. Yet, most want to stay home, and I cannot imagine what that cost will be in the future! Today the cost is around $30/hr.

There is a major difference between long-term care plans and cancer insurance. The insurance industry has designed different types of products for Americans who are concerned about long-term care and want to find a plan that is affordable or that can be approved due to underwriting, which was the problem you experienced. 

Let me explain.

Long-Term Care Insurance Options

1. Traditional Long-Term Care Policy: The younger you are, the lower the premiums will be. Look for a long-term care policy while you are younger and in good health. An LTC plan is coverage for nursing home care, assisted living, or care at home after a 30, 60, or 90-day (or longer) deductible has been met. An LTC plan is the top-of-the-line for long-term care planning. 
2.  Life and Annuity Policies: Many life/annuity insurance policies have a provision, or rider, for Long-Term Care. These may not meet your future LTC needs like a Traditional LTC policy would.
3. Veteran Benefits for Long-Term Care, “Aid and Attendance” Benefits: There are billions of VA pension dollars available for long-term care needs for Veterans to apply for their benefits. Must have a long-term care issue to qualify. Thank you to the VA for this great benefit for our Veterans and spouses!
4. Medicaid: Those with too much income and assets may not qualify for their state’s long-term care benefits through Medicaid.

Cancer Insurance

A cancer insurance plan will pay a lump sum amount when one is diagnosed with cancer. For example, for a specific monthly premium, a plan pays a set amount of $30,000. While a cancer plan is less expensive than an LTC policy, it does not offer the benefits of an LTC plan.

Readers, don’t put off until tomorrow what can be done while you’re still young-ish and healthy! 

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