Long Term Care Insurance

Long Term Care Insurance

Long term care is the financial assistance individuals need when they are unable to care for themselves and need the help with Activities of Daily Living (ADLs): bathing, dressing, transferring, toileting, continence and eating or they have severe cognitive impairment. The need for long term care can result from an accident, a short-term disability, chronic illness, and/ or from advancing age. Our plans also include benefits for individuals with Alzheimer’s disease.

Who needs it?
Over twelve million people of all ages have disabilities so severe that they require personal assistance to carry out their everyday tasks. This takes a large toll on families as well, since four out of five people who take on the role of primary helper are relatives. Women face a 50% higher risk than men for needing long-term care due to their tendency to live longer. A year in a nursing home is estimated to cost a national average of $55,000, which is substantially higher in California. By purchasing Long-Term Care Insurance, you can help cover all or a portion of these costs.

What are the monthly benefit amounts?
The costs of care vary by geographic region and by facility. In selecting a monthly benefit amount, which can range from $1,000 to $8,000 per month, you should consider the cost of residential care and/or nursing care around your area. Typically, facility services are likely to be more expensive than home care. It is impossible to determine what you may need in the future so we recommend plans that allow flexibility, whether you choose a Facility/ Residential Care or Home Care benefit.

When do benefits begin?
Typically, benefits begin 30, 90, or 180 days after you need assistance with two or more Activities of Daily Living (ADLs). If you use some of the waiting period while receiving covered care, those days are deducted from your remaining waiting period. This means that if your recover, then need to collect benefits later, your waiting period has been reduced by the number of days you used last time.

When is the best time to purchase Long-Term Care Insurance?
The right time to buy Long-Term Care Insurance is when you can afford it and before you need it. Long-term care is less expensive when the individual is young and healthy. Unfortunately, once a person health declines the individual may become ineligible for Long-Term Care Insurance.

How long do benefits last?
While more than half of those going into a nursing home will have stays of less than 90 days, those who remain in nursing homes will stay an average of 2.5 to 3 years. Of course, any individual’s experience could vary significantly. The benefit options for the length of covered care include 1 to 6 years or for your lifetime.

How are benefits paid?
Long-Term Care policies are either indemnity policies or reimbursement policies. With an indemnity policy the benefit is paid directly to the insured in the form of a monthly benefit check and the insured makes the choice of either staying in the comforts of their own home and having skilled nursing care or moving into a nursing care facility.

With a reimbursement policy the individual does not receive a monthly benefit check. The insurance company reimburses the nursing facility as medical expenses incur, up to the benefit amount. Furthermore, reimbursement policies do not pay the full benefit amount unless claims reach the maximum benefit amount of the policy. We recommend indemnity policies due to their flexibility, guaranteed monthly benefit, and ease of administration as medical claims do not need to be filed with the insurance company each month.

Can you protect yourself against inflation?
You can help protect yourself against the ongoing increases in health care costs by selecting a 3 percent or 5 percent annual increase in the previous year’s annual benefit. This amount will be compounded for life, as long as the policy remains in force, with a corresponding increase in the total benefit available to you. In addition the benefits will continue to increase each year even if you are receiving benefits (Simple, Compound 3%, or Compound 5% Inflation Riders).

What is the Return of Premium Rider?
TIf you elect this option and die while the policy is in force (or have a policy with joint coverage and are the second to die) the total premiums you have paid, minus any claim benefits you have received, will be paid to a beneficiary of your choice. This is an attractive option because it helps the family recapture their premiums if they have never needed to collect any claim payments (Return of Premium Rider).

Can I receive a spousal discount?
When purchasing either two individual policies or a joint policy, at the same time, a couple will receive a substantial discount when compared to the purchase of two individual policies purchased at different times. In addition, when purchasing a joint policy the couple receive benefits independently.

Does Medicare cover Long-Term Care expenses?
Medicare pays limited amounts of only skilled care. This is only applicable if the Long-Term Care is preceded by a hospital stay and the skilled care is only covered 100% for twenty days. After twenty days, Medicare will cover a portion of the next eighty days. After that, a person is left to whatever means is available to them to pay for the rest of their Long-Term Care. Medicare covers no custodial care for any length of time.

Contact us for more information.