Short-term care insurance is an insurance policy that pays for up to 1 year of care that you might need in a nursing home, assisted living facility, or other skilled care facility.
Short-term recovery care is very similar to long-term care in that it’s used to protect your assets from being depleted by expensive care. While the benefits are largely the same, there are differences between short-term care and long-term care.
|Short-term care||Long-term care|
|Benefit periods of up to 1 year||Longer benefit periods available|
|Very simple application||Very lengthy application|
|High chance of being approved (average is about 90%)||Low chance of being approved (average is about 50%)|
|Ability to apply up to age 89||After your 60s, your chances of being approved are low, and the cost is too expensive to maintain|
|Little to no rate increases||Expensive and continuous rate increases|
|Affordable coverage||Expensive coverage|
|Variety of carriers to choose from||Few carriers offer this product anymore|
|Quick application turnaround||Application takes a long time to process|
Short-term care is preferred by a lot of people because of these differences, but the biggest downside to short-term recovery care is that you can only buy protection for up to 1 year. You may end up staying in a nursing home for longer than this, which can be a problem. However, just under half of people stay in a nursing home for less than a year, and having this type of coverage would be ideal.
We always recommend some coverage over no coverage at all, and short-term care is very affordable.
The alternative to short-term care and long-term care would be a life insurance policy that has a built-in nursing home benefit. This is called a life insurance policy with a long-term care rider.
You can read more about that here.