Guide to Long Term Care Insurance

Long term care insurance is a private insurance policy that can help pay for medical and non-medical long term care services that are typically not covered by Medicare, Medicaid or other health insurance policies. Insurance coverage for long term care may vary depending on the plan you select.

In this Long-term Care Insurance Article:

Introduction To Long-term Care Insurance
Things To Consider When Choosing Long Term Care Insurance
Guide When Choosing A Long-term Care Insurance Provider
Is Long-term Care Insurance Right for you?

Long Term Care Insurance

Long Term Care insurance is used when a patient needs care for more than 90 days. Long term care can be a result from an accident, physical illness or cognitive impairment. Long Term Care Insurance covers what all the other health insurances don’t cover, such as care in your home, assisted living and nursing home facilities.

Generally, Long- term care insurance will cover skilled nursing care, assisted living, adult day care, hospice care, respite care and Alzheimer’s care. Other long term care insurance policies may also cover home care which will provide help with activities of daily living such as feeding, bathing, toileting, dressing, medication management and medical assistance in the patient’s home.

Long-term care insurance is not for everyone. There are some things you should consider before purchasing a long-term care insurance policy, which include your age, health, income, retirement goals, and wealth.

Many people are under the impression that Medicare will pay for long-term care expenses. This is not true. However, Medicare may pay for skilled nursing services only for a limited time but it has to be right after a hospital stay. Furthermore, Medicare will not pay for custodial care that includes assistance with activities of daily living. On the other hand, Medicaid may pay for nursing care, but you have to meet certain financial requirements, which vary from state to state.

Things To Consider When Choosing Long Term Care Insurance

Before choosing to buy a long-term care insurance, examine your health status, age and family support.

1. Health Status

Do you have some health issues that may cause you to need long-term care down the road or are you generally in good health?

If you have a medical condition and can no longer take care of yourself, you might want to consider getting a long-term care insurance. Long-term care insurance can help pay for the expensive cost of assisted living and other care facilities.

2. Age

What age are you now, and what age do you plan to retire? If you are in your 30’s and planning to work until 65 then long-term care insurance is probably not something you need to worry about just yet. But keep in mind that buying long-term care insurance at a younger age may be better since insurance premium will definitely be lower.
However, if you are in your mid to late 50’s and planning to retire at 65 long-term care insurance may be something you may want to consider.

3. Family support

Do you have family and friends who live nearby? Are they willing to take care of you when you need help? If you have family and friends who are willing to be your family caregiver, then you might not need long-term care. But if you do not have any family close by or if you’re family and friends are not available to provide care when you need it, long term care insurance might be good for you.

Guide When Choosing A Long-term Care Insurance Provider

Be sure to do your research when choosing a long-term care insurance provider. It will be helpful if you know the following:

How long has the company been around. There have been many long-term care insurance frauds in recent years so you want to be careful about who you are giving your money to.
Check reviews and ratings.There are several government websites that you can use as resources to check the ratings of long-term care insurance providers. You can also check with the Better Business Bureau (BBB) to see if any complaints have been filed against any potential long-term care providers.

Is Long-term Care Insurance Right for you?

Long-term care insurance can certainly bring peace of mind to you and your family should you become disabled and unable to care for yourself in the future. Talk to your family, financial advisor or insurance agent about long term care to determine if it’s right for you, your family, your medical and financial needs.

Long-Term Care Coverage:

Policies provide comprehensive long term care coverage for home care, assisted living and nursing facilities. Benefits are paid using one of three different methods:

Expense-incurred method
Indemnity method
Disability method (cash)

Daily or Monthly Benefits:

$100-$500 day or $3000-$15,000 monthly

Benefit Periods:

Insured person may choose from 2, 3, 4, 5, 6, 10 years or lifetime benefits. This period determines your pool of benefits.

Examples:

For a 4 year plan at $6000/month = $288,000
For a 4 year plan at $200/day = $292,000

Elimination Periods

(sometimes called a deductible or a waiting period):

This means benefits can start 0, 20, 30, 60, 90 or 100 days after you start using long-term care or become disabled.

Inflation Protection:

5% simple
5% compound
no inflation

Inflation increases the pool of money each year. This is to keep up with the rising costs of long-term care.

Options for Funding Long Term Care Insurance

Continuous Pay for Lifetime
10-pay: Pay 10 years and then paid up for life
Return or Premium: at death, premiums paid for the long term care policy can be fully or partially refunded)
Pay to age 65

What Triggers Long Term Care Insurance Benefits

2 out of 6 Activities of Daily Living

Bathing
Eating
Dressing
Toileting/Continence
Transferring
Cognitive Impairment

About the Author:

Shelly Kapfhammer, is a Long Term Care Specialist for the Tax & Financial Group in Newport Beach, California. Shelly provides training and education to Financial Advisors, Life Insurance Professionals, Property and Casualty Agents, CPA’s and Attorneys on the importance of Long Term Care in their portfolio. She works closely with the group health market on the need for Long Term Care as a health benefit in the workplace, as well as, affinity groups and associations. Shelly also personally sells Long Term Care Insurance to the indivual and group market. Shelly has been a guest speaker on the Los Angeles radio station 99.3 KCLA.

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