What is a key characteristic of a long-term care insurance policy?

A long-term care insurance policy is primarily designed to cover the costs associated with chronic illnesses and disabilities that require long-term care services. This may include assistance with daily living activities such as bathing, dressing, or eating, either in a facility like a nursing home or through in-home care. The key characteristic lies in its focus on providing financial support for individuals who face prolonged health challenges that traditional health insurance often does not cover.

The other options do not accurately reflect the core functions of such policies. Unlike the suggestion that it covers only short-term services or excludes home care, long-term care insurance is specifically tailored to address the needs for ongoing care that might last for years. Additionally, the mention of high annual deductibles is not characteristic of long-term care insurance, as these policies typically aim to offer coverage without the burden of high out-of-pocket costs associated with prolonged care.