Final answer:
Long-term care insurance primarily protects against the potential financial burdens of extended healthcare services by covering costs that are not typically handled by other forms of health insurance.
Step-by-step explanation:
The primary function of long-term care insurance is to protect against catastrophic risks associated with extended periods of care not covered by regular health insurance, Medicare, or Medicaid. Its main objective is to cover the costs of long-term care services, which may include nursing home care, home health care, or assisted living services. This form of insurance typically provides coverage that helps to pay for the support and services necessary when a person is unable to perform basic activities of daily living such as bathing, dressing, or eating over a prolonged period.
Understanding that the average person's payments into insurance over time must cover their claims, administrative costs, and allow for the firm's profits aligns with the fundamental law of insurance. Long-term care insurance hence ensures that individuals do not have to exhaust their personal savings or rely on family members to pay for their extended care needs.