Long Term
Care Insurance Planners provides quotes and
information on coverage to help you make better choices. If you
have any
questions not covered in these
long-term-care insurance articles, contact us at: (866) 582 - 0003.
1. What is Long Term Care Insurance?
Long term care insurance is defined as the type of care received
when someone needs assistance--either at home or in a facility--with
activities of daily living due to an accident, an illness, or
advancing age.
You can see by the definition that the need for long
term care is not limited to the elderly. Anyone who cannot
function independently
may need the protection of long-term care insurance. Accidents
and unexpected illness can happen at any time, at any age.
The risk may be greater than you expect.
If you needed long term
care, who would provide it? Where would you receive it? How
would you pay for it? These are important
questions to consider.
How much does Long Term Care Insurance cost?
National nursing home care costs average between $20,000 and
$60,000 per year, depending upon location and level of care.
Home-based care costs vary depending on the type and frequency
of care required. For most of us, this expense could have a
significant impact on our financial security.
Who pays for Long Term Care Insurance?
Many people believe that health insurance or a government program
will pay for long term care. Currently, personal and government-funded
programs do not cover the majority of long term care costs.
Health insurance is designed to reimburse expenses associated
with medical costs such as tests, medicines, doctor visits, or
other specific services. It will not pay the added cost of long
term care.
Government programs, at present, are restricted or
limited. Medicare, for instance, is designed to provide health
insurance for people
over age 65 and pays only 5% of long term care costs nationally.
Medicaid pays approximately 45% of the total spent on long term
care nationally, but individuals must deplete their assets to
poverty level in order to quality for Medicaid benefits. Individuals
or their families typically carry the burden of long term care
expenses. In fact, consumers pay 45% of the nation’s long
term care costs.
How do I apply for Long Term Care Insurance?
Long term care insurance is offered in a different fashion than
group health and other insurance products. Retirees deal directly
with an insurer like Insurance Planners for coverage, premium
payments, claims, and all other aspects of the plans.
Long Term Care Insurance will provide free Long Term Care Insurance
quotes to all retirees, spouses, and eligible dependents; however,
some individuals may be denied coverage because of poor health.
Rates will vary with your age.
Long Term Care Insurance cannot prevent you from ever-needing
long term care, but it can help you protect yourself and your
family from the financial impact. Please take the time to learn
more about this coverage and the valuable protection it provides.
2. Covered Long Term Care Facilities and Services
It is important to know which facilities and services are covered
under your long term care policy. Long term care insurance
usually covers assistance with activities of daily living such
as eating, bathing, dressing, toileting, transferring, and
continence. Make sure the policy you are considering offers
the benefits you think you might need.
Listed below are services
a long term care policy might cover:
Example:
The following example uses a long-term care insurance policy
that includes $150 daily benefit, four-year benefit period,
90-day elimination period, and inflation protection with
a major carrier.
Bob, 50 years old, purchased insurance, the
annual premium would
be $1,338.75. If he paid this premium until he was 85 years
old, he would have paid in a total of $46,856.25 in premiums.
If
he waited just five years to purchase the same policy the annual
premium would be $1,974.37. The increased premium
takes into account that Bob is now five years older and he
has to purchase
a higher daily benefit since the cost of care has increased.
If he paid until he was 85 years old he would have paid in
a total of $59,231.10.
Waiting five years cost Bob an extra $12,374.85 in premiums
over his lifetime… it did not save him a single penny! In fact,
he was also uninsured for five years.
Insurance companies can increase premiums if the increase affects
an entire class of policyholder. Some companies raise premiums
more than others and this information is not readily available.
Check with your state insurance department
to find out about the premium-rate increase histories of
both the company and the specific policy you are considering.
5.
Myths and Facts about Long Term Care Insurance
There are many myths about long term care insurance. It's easy
to be fooled by them: Long Term Care insurance is a subject
that no one really wants to examine, because people are afraid
of
it. However, fear is most effectively cured with information.
Some of the most common long term care insurance myths are
listed below.
" I'm Too Young"
A lot of us think that only senior citizens need to worry about
long term care, so we put off preparing for the possibility.
The fact is that untimely accidents or illnesses can strike
at any age. While 60% of people who will need long term care
are
65 or older, 40% are working age adults between the ages
of 18 and 64.
People of any age can develop serious conditions
that require assistance with routine daily activities for an
extended
period of time and such help could be very costly. Long
term care insurance
can help cover the cost of this care and protect your assets.
"
My Family Will Take Care of Me"
This might have been a reasonable
assumption years ago, when grown children tended to settle
near their parents and
women stayed at home. In today's society, children may live
across
the country or around the globe. And many women are active
in the workforce, with less time to fulfill their traditional
caregiver
role.
"Medicare and Medicaid Will Cover My Bills"
Medicare is generally available for those who are disabled and
for people over age 65. Medicaid is the government program
to help those in financial need. It won't kick in until virtually
all of your assets and your spouse's assets have been consumed.
People who have higher assets or income may end up "spending
down" their savings and assets in order to be eligible.
"I can save for my Long Term Care Needs"
Will you have saved enough money to pay for the raising rate
of nursing home expenses? And, if you have that much money,
will you want to spend it for long term care services? Many
people will find that their assets will be depleted rapidly
if they have to pay for long term care services out-of-pocket.
"Long term care insurance is too expensive"
Long term care insurance premiums are lower the younger you are
when you buy. So, it makes sense to purchase coverage when
you are younger and when premiums are more affordable. The
bi-weekly premium if you purchase coverage at age 40 for a
plan available from the Federal Long Term Care Insurance Program
that covers home and facilities care and keeps pace with inflation
is $30.05.* At age 50, if you purchase the same plan, that
plan will cost $43.06*
6. Long Term Care Insurance in Your Retirement Plans
Medical sciences has giving us the ability to live almost 15
to 25 years longer after retirement. With the average life expectancy
into our 80's, people need to be planning for the additional
risks that come with a longer life span.
The main concern of most retiree and seniors including outliving
assets, maintaining the current assets from inflation, and preserving
good health and independent lifestyles.
One of the greatest risk to retirement planning is the cost of
long term care. Most people over the age of 65 will need some
kind of long term health care services, either at home, in a
nursing home facility or in an assisted living facility.
The national average of long term care costs ranges between $50,000
to $60,000 per year. Seniors spend more on out of pocket
medical bills than the rest of the population. These may include
out-of-pocket
medical expenses, prescription costs, insurance, doctor expenses,
and more. The costs of long term health care for a person
with diabetics, Alzheimer's, severe arthritis, dementia, are
so potentially
high that it could wipe out any assets the person has. The
average long term care for a diabetic would costs about $200,000
for
4 years, and over $400,000 for a person with Alzheimer's
disease. Have you planned how you would pay for your care if
your health
changes for the worse. Have you considered the costs of your
care on your whole family? With long term care insurance
you can be in control of where, when and how you will receive
your
care.
Are you relying on Medicaid to take care of you? Medicaid's
tight eligibility requirements makes it harder for most people
except
the very poor to receive benefits. Even now, state governments
with budget deficits are working to tighten restrictions
as to who can qualify for Medicaid assistance.
You've spent
a lifetime building your assets and estates. Why not take the
steps necessary to minimize it against risks.
Using Long term care insurance as a risk management tool
is the smart
thing to do.
7. Long Term Care and Medicaid
Medicaid is a government program that pays for certain
health care services and nursing home care for older
people with low
incomes.
Medicaid Coverage and Medicaid Benefits for
Nursing Homes and Community Services
Medicaid coverage includes physician fees, hospital
and long term care costs. Additional coverages include
drugs,
equipment
and transportation.
Medicaid benefits for nursing
homes includes room and board and long term care health services.
In
most states,
Medicaid
coverage
also extends to some community and home based long
term care services. Medicaid benefits for community
services
usually only
covers health care services. Rent, food, utilities
and taxes have to be paid by the recipient out-of-pocket.
Medicaid in some
state may leave allowances that are too small and
many recipient are forced to go to a nursing home
instead.
Medicaid Eligibility for Nursing Home Expenses
Both federal and state guidelines for income and
personal assets must be met for Medicaid eligibility.
If you
have substantial
income and assets and still qualify for the program,
Medicaid law usually requires you to spend down
your assets on health
care each month before Medicaid pays.
Financial
Medicaid eligibility for nursing home and community waiver
may require recipients to
be receiving
Supplemental
Security Income (SSI) payments. If the recipient
is qualifying under alternate
income rules and receive no SSI payment, the
recipient can have no more than $2,000 in resources.
Resources
are defined as any asset that can be used to produce income.
Some states may not count
your
home and
a car when determining
Medicaid eligibility. However, Medicaid may
subject these non-income producing assets to estate recovery
upon the
death of the recipient.
Recipients that gift
away their assets are subject to a lookback period usually
within 36 months
of a community
waiver or nursing
home stay and will be counted as resource.
Irrevocable trust assets created 60 months
prior to the nursing
home stay will
also be counted as an asset or resource and
may be subjected to the spend down requirements.
Each state has different laws about how much
money and assets you can keep and still be
eligible for
Medicaid benefits. Contact
your state Medicaid office, department on
aging or state
department of social services for more specific
Medicaid information, Medicaid
requirements and for Medicaid application.
8.
Alzheimer's Disease and the Costs on Family Caregivers
Alzheimer's disease is a progressive, irreversible brain
disorder that affects an estimated 4 million Americans, most of
whom are
over 65 years of age. As the population ages, the number
of people with Alzheimer's is expected to climb. Alzheimer's patients
gradually
lose their memory, lose learning abilities, language, and
motor skills. They become disoriented, suffer personality changes,
and lose their ability to take care of themselves. Eight
years
is the average life span a person is expected to survive
when diagnosed with Alzheimer's disease.
The cost of caring for
someone with Alzheimer's disease
Many Alzheimer's patients live in their own homes or are cared
for by family and friends. Family caregivers can become
physically, emotionally, and financially drained by providing
constant constant
care and supervision for a person with Alzheimer's disease.
The disease may cause the patient to be aggressive, easily agitated,
have delusions, become withdrawn, have disruptive behaviors
and
become disoriented. Families usually consider nursing homes
or assisted living residences when condition worsens and the
need
for more personal care and supervision is more than can
be provided at home.
Alzheimer's disease and other cognitive disabilities
are the leading causes for nursing home admissions. People
who have Alzheimer's
disease eventually require continuing, long-term care,
either at home, in a nursing home or other continuing-care
facility.
The financial hardship can be extreme on a family
that needs to put their loved ones in a nursing home, assisted
living facility
or to get the necessary home health care help.
Many
caregiver families put their own retirement savings on hold,
have other responsibilities to their own children,
and may suffer
in their careers because they can't take travel assignments
or work late.
Financial protection with long term
care insurance
Long term care insurance provide families the opportunity
to give their loved ones the adequate care needed.
Many long term
care insurance policies generally cover Alzheimer's
disease and organic cognitive impairment conditions.
However,
long term care
insurance is best purchased before the problems
arises. If the insured has Alzheimer's disease at the time
of purchase, request
for insurance coverage may be denied.
The physical,
emotional, and financial strain of caring for a loved one is
extreme for the caretaker
family.
Adult children
can protect their own financial security by purchasing
long term care insurance for loved ones.
9. Money
Saving Tips on Long Term Care Insurance
a) SHOP AROUND! Premiums vary greatly in Long Term Care Insurance.
We represent most of the major Long Term Care Insurance companies
and we find differences of 10% to 50% in the premium charged
for essentially the same policy benefits. Use an independent
broker who will give you a quote and represent you.
b) WEIGH BENEFITS AGAINST COST! Know which policy benefits are
important to you.
c) LONGER ELIMINATION PERIODS! A 0 day elimination period makes
the premium higher than a 90 day elimination period. Most people
can afford to pay the first 90 days, and Medicare, HMO’s
and Supplements may cover all or part of these expenses. It works
just like an auto insurance policy deductible…the larger
the deductible the lower the premium will be.
d) LONGER BENEFIT PERIODS! Cover the catastrophic need. Lifetime
coverage is most desirable, since you will not outlive the benefits.
Although it does not happen often, a long term care need can
last for over 10 years. This allows enough time to plan your
estate disposition. Any property you transfer within three years
of a Medicaid Application is subject to possible reversal and
criminal penalties.
e) AGE CHANGES Birthdays increase the premium anywhere from 4%
to 10% depending on your attained age. By purchasing when you
are younger and in good health you will always pay less premiums
and your coverage will be assured for a longer period of time.
f) SPOUSAL DOMESTIC PARTNER DISCOUNTS Most insurance companies
offer a discount for a husband and wife applying for coverage
at the same time. A few insurance companies offer discounts for
a joint applicant. Any two individuals living together in the
same household may qualify for this benefit.
g) SIMPLE INTEREST VS. COMPOUND INTEREST Anyone under 70 should
give strong consideration to either a simple interest or a compound
interest Cost of Living Adjustment (COLA) Rider. This will allow
your benefits to keep pace with inflation. If you are approaching
70 and find the cost of the compound inflation rider prohibitive,
consider the simple interest inflation rider, or purchases somewhat
higher benefits that you need today without the inflation rider
to compensate for future long term care costs.
h) SOMETHING IS BETTER THAN NOTHING If nursing home costs are
currently $150 a day in your area, and you can only afford a
day plan, go ahead. Right now you are self-insuring 100% of the
exposure. It is certainly better to have two thirds (66.7%) covered
now than nothing at all. Don’t procrastinate because of
high premiums. Pick a premium you can afford and purchase a Long
Term Care Insurance plan based on your budget.
i) BIGGEST BENEFIT IS PEACE OF MIND Studies show that the most
important reasons people purchase Long Term Care Insurance is
to protect assets and to assure that they will not be dependent
on others.
10. Long Term Care Insurance Shopping Tips
a) Buy a long term care policy long before you expect to need
benefits. The older you are when you buy a long term care policy,
the higher your premium will be. Medical conditions can also
arise as you get older and will also increase your premiums.
b) Compare many policies. Policies and services differ between
long term care insurance companies. Compare the different coverages
and costs.
c) Make sure the agent or company selling you the long term
care insurance is licensed in your state. Usually you can
check with
your state’s Insurance Department. Don’t become
a victim of insurance fraud.
d) Check the long term care insurance company ratings and financial
stability. Go online at an insurance rating company for fast
and easy service. State department of insurance may also keep
records of compliant ratios.
e) Check and understand the long term care insurance benefits
and exclusions before you buy a policy. Ask questions if you
need clarification or have an advisor view the policy.
f) Never pay with cash. Pay by check or money order. Make checks
payable to the long term care insurance company and not the agent.
g) Take your time. Don’t feel pressured to buy a policy.
h) Review your policy within the free-look period. Most states
have a certain period of time in which you can change your mind.
You can cancel the policy and request a refund within this period.
Check with your state insurance department to find out how long
the free-look period is in your state.
i) Never sign a blank application. Answer all questions truthfully.
Long term care insurance companies can deny a claim or cancel
a policy if the application is incomplete or inaccurate.
j) If you are changing long term care policies, receive and review
the new policy before canceling the current policy.
11. Choosing the Right Long Term Care Insurance Company
Choosing the right insurance carrier is one of the most
important decisions to make. The decision should not be on the
cost of
the policy alone. Consider if your insurer will pay when
you need care and if they will still be in business when the
need
for your long term care arises. Also consider if the long
term care insurance company had rate increases in the past or
if the
long term care insurance rates have been stable.
Company Financial
Strength and Size
The average age that most people will need long term care insurance
is 78. If you purchase long term care insurance when you
are 55, you may not need to make claims for another 23 years.
You
will want to pick a long term care company that is financially
strong enough and large enough to be around for 23 years
from now.
Consumers can check long term care insurance company
rating
and financial size online including:
A.M. Best's Insurance Reports;
Standard and Poor's; and
Moody's.
Rate Stability
Long term care insurance companies cannot increase
your individual premium for changes in your age or health. However,
companies
can file a rate increase for a class of policyholders or
all policy holders on a specific contract form in any given state.
Insurance companies usually want to keep consumer confidence
by keeping rates stable. Companies with high claim loss may
be
more likely to need future rate increases. To get an idea
of long term care insurance companies’ claim loss, read
the NAIC’s annual “Long-Term Care Experience Report” showing
actual claims loss ratios. Consumers can also inquire if
the company has had any previous rate increases.
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Long Term Care Insurance Quotes...
Myths and Facts
