Final answer:
Long-term care insurance is a type of private insurance that individuals can purchase to cover the future costs of long-term care, which are not covered by regular health insurance plans. This insurance is essential for covering costs related to daily living assistance for those with chronic illnesses or disabilities, and supplements government programs like Medicaid and Medicare.
Step-by-step explanation:
The private insurance policy that an individual can purchase to help pay for long-term care in the future, should it be needed, is known as long-term care insurance. This type of coverage is designed to cover costs that regular health insurance plans do not, such as the expenses associated with daily living assistance for individuals who have chronic illnesses or disabilities. There are two main types of private health insurance: employment-based insurance, provided wholly or in part by an employer or union, and direct-purchase insurance, which an individual buys directly from a private company.
Long-term care insurance is particularly important as it covers the type of care required when someone is unable to perform basic activities of daily living (ADLs) such as dressing, bathing, or eating. Unlike public healthcare, which is funded or provided by the government, private healthcare must be purchased. The U.S. government offers programs like Medicaid for those with low incomes and Medicare for those over 65, yet private insurance is necessary for certain services and populations, such as long-term care for the aging population.
Having various types of insurance including car insurance, house or renter's insurance, and life insurance is common. Similarly, purchasing long-term care insurance is a proactive step that individuals can take to ensure their future healthcare needs are met without placing a financial burden on themselves or their families. Recognizing the potential high costs of healthcare as one ages, this type of insurance can be particularly vital.