Long-term care insurance: financial protection if you lose independence
Long-term care insurance is intended to provide financial assistance when a person loses the ability to function independently and needs prolonged care at home or in an institution. This page explains how eligibility is determined, what health-fund long-term care insurance includes, how long the benefit is paid, and why insurance should be combined with long-term planning and savings.
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Long-term care insuranceA contract under which an insurance company undertakes to compensate the insured in the event of damage in exchange for a periodic payment. is one of the most important types of insurance, especially as we grow older. With age, the risk of reaching a condition in which a person cannot function independently also increases.
One in four people over age 65 is expected to become dependent on long-term care. The costs, ranging from ₪8,000 for care at home to ₪15,000 in an institution, can drain a lifetime of savings. In this chapter, we will learn how the system defines a person in need of long-term care, the terms of the uniform policy offered by Israel's health funds, or Kupot Holim (קופות חולים), and why personal supplementary savings must be built alongside the insurance.
When is a person considered dependent on long-term care?
Eligibility for the benefit is determined by a functional assessment known as the ADL test, which checks the ability to perform six daily activities:
Getting up and lying down, walking and mobility, bathing, dressing, eating and drinking, and controlling bodily functions.
- When a person cannot independently perform a substantial part of these activities, they may be recognized as dependent on long-term care under the policy's terms.
- Cognitive impairment: Conditions such as dementia or Alzheimer's disease entitle a person to the full benefit because supervision is required, even if physical functioning is intact.
Long-term care insurance through the health funds
Most Israelis are insured through group long-term care insurance offered by the health funds.
This is a uniform policy supervised by the state, so the insurance terms are similar across the funds. The health funds and insurance companies mainly compete on price and quality of service.
- Joining early: It is advisable to join at a young age. The premiumThe periodic payment made to the insurance company. is lower, and the rights are preserved even when switching health funds.
- Benefit for children: Children added through their parents are exempt from paying a premium until age 18, but receive full coverage.
- Waiting period: The policy begins paying only 60 days after the insured person is defined as dependent on long-term care.
How much does the policy pay?
Factors that affect the benefit amount:
- Age when joining: The younger you were when you joined the insurance, the higher the monthly benefit available to you.
- Place of care, home or institution: The policy distinguishes between care at home and staying in a long-term care institution, where the costs are substantially higher.
Example benefit amounts for people who joined by age 49
Example benefit amounts
| Place of stay | Payment type | Estimated benefit |
|---|---|---|
| Care at home | Indemnity: a lump sum paid directly to the insured person | About ₪5,000 per month |
| Long-term care institution | Reimbursement: repayment against receipts for the institution's cost | Up to about ₪10,000 per month |
For people who joined at an older age, these amounts are substantially lower. A full breakdown by age is available on the Kol Zchut (כל זכות) website.
Important to know: the waiting period
Insurance payments do not begin on the first day of a long-term care condition. There is a 60-day waiting period. This means that insurance benefits are paid only from the third month, after 60 days have passed from the date you were recognized as dependent on long-term care.
Payment duration
Before December 2023, it was possible to buy extensions that increased the payment period to 15 years and even raised the benefit amount through expanded insurance coverage, but these extensions are no longer sold.
After the payment period, if the person still needs long-term care, the costs may fall on the insured person and their family.
Private long-term care insurance
The long-term care insurance market has undergone major upheaval in recent years because of longer life expectancy:
- Private policies closed: Since 2019, insurance companies have stopped marketing new private long-term care policies.
- Meaning: For most of the public, health-fund insurance is the only available coverage. Anyone who holds an older private policy should not cancel it without first understanding its value.
This situation has increased each person's responsibility to plan in advance how future long-term care will be funded.
Common mistakes and what to learn from them
- Relying exclusively on insurance: Health-fund insurance is only "first aid." Personal savings must be created for a long-term care condition that continues beyond five years.
- Joining at an older age: The premium rises sharply, and the benefit you receive will be substantially smaller.
- Failing to provide medical information: The insurance company may reject a claim if you did not report an existing medical condition when joining.
The bottom line
- What is it?
- Monthly financial assistance intended to ease the cost of caring for a person who has lost their independence.
- What is it not?
- A lifelong solution. The coverage currently available is limited in both duration, five years, and amount.
- The main advantage
- Helps prevent an immediate financial collapse of the family when the insured person becomes dependent on long-term care.
- The main disadvantage
- The benefit usually does not cover the full cost of care, and it stops precisely when the most complex and expensive stage may be reached.
- Who is it for?
- Everyone, especially children, who receive it free of charge, and young people who want to secure a higher benefit.
Frequently asked questions
What happens if I switch health funds?
Your long-term care insurance rights are preserved and move with you to the new health fund, without another waiting period or health declaration.
Is the money paid directly to the caregiver?
For care at home, the money is transferred directly to the insured person's bank account as an indemnity, and they decide how to use it.
In summary
Long-term care insurance is necessary but not sufficient. It gives us breathing room for the first five years, but responsibility for long-term planning remains with us. Combining health-fund insurance with private savings is the only way to help ensure dignified aging for ourselves and our loved ones.
Given longer life expectancy and changes in the long-term care insurance market, it is important to combine insurance with financial planning and personal savings that can help fund future long-term care. For more detailed and current information about rights, insurance terms and claim procedures, consult the Kol Zchut website.