THE INSIDERâ€™S GUIDE:
LONG TERM CARE INSURANCE
All your questions answered
Table of Contents Introduction
Letâ€™s Start with the Basics
What is Long-term Care Insurance? Why Does Anyone Need Long-term Care Insurance? What are the Benefits? How much does it Cost? Is Long-term Care for You? 8-11 Who Should Consider Long-term Care Insurance? What is Best Age to Buy Long-term Care Insurance? What are the Different Sources for Long-term Care Insurance? Are LTC Benefits Taxable? What Types of Conditions Does LTC Cover? Choosing Your LTC Policy
How to Choose Your Long-term Care Policy Is a LTC Policy Necessary? Can my Long-term Care policy be used from one state to another? What is Inflation Protection? Tax Advantages & Partnerships Plans
Are there Tax Advantages? What is a Partnership Policy? Paying Off LTC Premiums
What Factors Affect the Cost of LTC Insurance? What happens if there is a Failure to Pay the Premium? What Next?
About 70% of seniors in this country will ultimately require longterm care
Introduction We know that buying any insurance policy can be a bit confusing, particularly when it comes to those that are healthrelated. This quick reference guide was developed to help you understand all you need to know about Long-term Care insurance.
For most of you, this book will clarify everything you ever wanted to know about long-term care insurance. You will feel a sense of relief… as though a big burden has been lifted from your shoulders. Others may still have a few questions, particularly about selecting the plan that’s right for you.
As you get older, the question of who is going to take care of you when you can no longer take care of yourself is like a black cloud over your head. Many Americans are being forced to face that situation with less than desirable options because they waited too long to figure out where to turn.
We’re in business to answer your questions and help you find the most comforting and comfortable options for your lifestyle and financial investment in your future. We encourage each of you to pick up the phone and speak with one of our experienced insurance professionals. Long-term Care Insurance could be the answer you’ve been looking for.
Here’s a statistic that might make everyone think twice before procrastinating on finding a solution. About 70% of seniors in this country will ultimately require long-term care and the older they get the higher the chances become.
The Table of Contents on the previous page is interactive, so you can easily refer to specific sections later once you have had a chance to review the complete content.
Although Long-term Care insurance has been available for a few decades, it is rarely publicized. Auto, home and health insurances seem to overshadow future concerns and then before you know it there is more life behind than ahead. This eBook was developed to take the fear out of your future and give you solid and simplified information.
Let’s Start with the Basics Q: What is Long-term Care Insurance? A: SO MANY QUESTIONS arise when the subject comes up. In a nutshell, Long-term Care Insurance is exactly what it sounds like. It is an insurance policy that will provide financial help with medical and home care expenses when you need it. The level and length of care depends on the policy you select.
Q: What are the Benefits? A: THE BENEFITS ARE PLENTIFUL. Having Long-term Care Insurance eliminates the stress of being incapacitated, provides affordable quality medical care and maintains your independence! You won’t have to rely on friends and relatives.
Q: Why Does Anyone Need Long-term Care Insurance? A: NO ONE DREAMS of ending up in a nursing home or having to need adult care in some form or another. You are probably aware, but each form of care is very costly. Unless you want to end up in a government subsidized facility, which has gotten below average care ratings, you need to think ahead. Some elderly people prefer to have 24-hour care at their home. This can cost anywhere from $7,000 to $12,000 per month, depending on the geographic area and the level of service you need. Do you have the funds to pay for the type of care you may need? Surely, you don’t want to pass this financial liability onto your kids.
Q: How much does it Cost? A: WITH SO MANY OPTIONS, the cost is up to you! There are factors that determine your monthly premium, such as location, age, health and preferences. For example, if you have a small nest egg and retirement income a longterm care insurance plan will avoid having your savings depleted from sky-high medical costs. If you and your partner are in your 60s, you can expect to pay about $3,490 which would cover over $666,000 for care at the age of 85 or older. Women pay more than men due to the higher chances of living longer. For example: a single man in his 50s might pay around $1,870 yearly for benefits that would provide around $386,500 for care at the age of 85 or more. Whereby a single women around that same age would pay $2,965 yearly for the same benefit. For more information or to get specific prices for your situation fill out the information here.
Affordable quality medical care
Is Long-term Care for You?
Q: Who Should Consider Long-term Care Insurance?
A: QUESTIONS TO ASK YOURSELF Are you willing to change your lifestyle if you become unable to care for yourself? What will happen if you get in an accident that causes a permanent condition? Is your family willing and able to care for you in the event of a stroke, heart attack or dementia? Do you think your children could stand by and watch you decline? Or would they wind up pitching in financially at their own expense? You may be planning to live with a relative or friend or you may have stashed away funds to pay for an assisted living space. Even so, keep in mind that the medical expenses in this country have spiraled out of control.
Jesse Slome, executive director of the American Association for Long-Term Care Insurance said it best, “It’s not a one-size fits all.” The rich won’t need it and the poor can’t afford it and will have to rely on Medicaid. However, if you are in between the two ends of the spectrum, then it purchasing a policy is likely a wise decision. Discuss with your financial advisor Research the annual cost of a semi-private or private room in a nursing home. Review your current health with your physician Talk to an experienced insurance professional
Q: What are the Different Sources for Long-term Care Insurance? A: MOST SENIORS are concerned about having a chronic illness, disability or other worrisome conditions and how they might be able to pay for them. There are different types of policy sources that may be available: Individual plans: These are usually purchased through an insurance agent or broker. Be cautious about who you work with, as some are not long-term care insurance savvy. There is additional training involved for those handling these policies. You can always require proof or check in with your state’s insurance department for confirmation. Employer-sponsored plans: Some employers offer group policies or even offer individual policies at group discounted rates. These days, employer-sponsored plans are not as available as they have been in the past. However, if you’re lucky enough to work for an employer who offers this, and you qualify, then even if you leave you can generally take the policy with you. Organizational Plans: Group rates are available within organizations such as AARP. As mentioned above, make sure you can take the policy with you should you leave. Also make sure the options that matter to you are available. Do not settle. This is your future. Joint policies: Often ideal for a husband and wife or two partners, joint policies cover more than one person. The downside is that the total coverage is for both parties. So if one winds up using a large portion of the benefits, then the other is left with what remains. So there is more risk involved with joint policies than with individual. Q: What is Best Age to Buy Long-term Care Insurance? A: THE YOUNGER AND HEALTHIER YOU ARE, the cheaper and more comprehensive the policy will be. We recommend serious consideration for those in their 50s. You’ll have a better read on your health requirements and financial situation at that time. Plus most policies will allow an increase should you decide you need it in the future.
The bottom line is if you become aware of your options early on and take action then you won’t be back peddling when it’s too late. Can you imagine the nightmare of trying to figure this out when you’re in your 70s?
10 Is Long-term Care for You?
Q: Are LTC Benefits Taxable?
FOR THE MOST PART, we are happy to note that benefits used are not taxable. There is a ceiling on how much before they are counted as income. That amount changes each year yet the likelihood of your income rising as you get older is nil. So it is pretty safe to say that between a declining income bracket and associated expenses, you will not have to worry much about being taxed. That alone, makes long-term care insurance a pretty good investment.
Q: What Types of Conditions Does LTC Cover?
MOST OF THE POLICIES that are sold today are pretty comprehensive. Of course, it depends on the policy, but generally speaking you would be able to use your benefits in the following settings: Your home Adult day service centers Hospice care Respite care Assisted living (also known as Residential facilities or Alternate care facilities) Alzheimerâ€™s care facilities Nursing Homes
Here is how those services operate:
Many people think the government programs are going to be the answer and that long-term care needs will be covered by Medicaid and/or Medicare.
Within your home settings, most policies include: Skilled nursing care Occupational therapy Speech therapy Physical therapy Rehabilitation therapy Help with personal care, such as bathing, dressing and walking
Some policies even cover meal preparation and housekeeping!
Medicaid â€“ Pays for skilled nursing home services and other communitybased services for low income Americans who have gone through all of their assets. So you would have to pay out-of-pocket until you have reached the asset limit allowed by the federal and state guidelines. In some cases, your assets will have to be completely depleted before you can qualify for Medicaid. Hereâ€™s another catch. Not all nursing homes will accept Medicaid and you can bet the ones who do, are rarely the nicest. Medicaid can actually determine which facility you will use. Medicare â€“ Covers up to 100 days of skilled nursing home care depending on the conditions of the patient. It was not developed to finance longterm care. Medicare will not pay for home help, home aides or assisted living cost. It is not really a long-term option although many people have a misconception about how this program works, until it is too late.
Choosing Your LTC Policy
Q: How to Choose Your Long-term Care Policy
THE BIGGEST CONSIDERATION is your financial situation. We do not recommend jumping into a policy if you canâ€™t cover the premiums. However, for a quick check to see what your policy preferences would cost fill out this quick form. If your finances are in good standing, then typically you will want to: Assess your risk Cut or raise the cost based on deductible Purchase a plan before you need it â€“ preferably on the younger side Determine what you can afford Then talk to a long-term care insurance professional who can give you options that will really make a difference physically and emotionally. Just like all other insurance policy, they remove the risk of potential health emergencies and catastrophes.
Q: Is a LTC Policy Necessary?
THAT IS A PERSONAL DECISION. Some people like to fly by the seat of their pants, while others like the peace-of-mind insurance gives themâ€Ś particularly as time and health move into a future of unknowns. Here are a few issues to keep in mind: Medicaid will only kick in when your personal assets have been completely depleted. So if you had any desire to leave anything to your heirs that may not be possible without long-term care insurance. If you wind up having to live in a nursing home, your personal assets can be sold to help defray healthcare costs. However, are you ready to be completely dependent? if you have to count on others to dissolve your assets while being cared for in a home how would that make you feel? Do you have children or others who would be willing and capable to handle this for you?
Medicaid will only kick in when your personal assets have depleted
California has the strongest LTC insurance standards of any state WWW.LTCPLANFINDER.COM
Choosing Your LTC Policy
Q: Can my Long-term Care policy be used from one state to another? A:
THAT DEPENDS on the states involved. For example, if you have a policy from California and it has a specific ceiling that is not the same as your new home state of Ohio, then you may be at a disadvantage. NOTE: California is known as having the strongest LTC insurance standards and protection than any others in the country. Another example: If the assisted living standards in one state donâ€™t match those in another, then you are again at a disadvantage. Before moving out of state, we recommend that you contact your LTC insurance professional to find out exactly what will be covered. Q: What is Inflation Protection?
THAT IS A GOOD QUESTION. Inflation is a constant, particularly within industries where the demand outweighs the supply. The bulk of the baby boom generation has yet to settle down so within the next decade services and facilities will become more plentiful and costly in addition to economic inflation. The youngest boomer was born in 1964 and will be 54-years-old in 2018 and the oldest, born in 1946, will be 72 this year. So it will take until 2030 before the entire generation passes the age of 65. So it is more than possible than ever that associated costs will rise above inflation, which means unless you have a bottomless savings account, you canâ€™t afford to go without some level of protection.
Tax Advantages & Partnerships Plans Q: Are there Tax Advantages?
THE ANSWER TO THIS is yes and no. Qualified long-term care insurance policies are tax deductible for any unreimbursed medical expenses. In 2018, the expenses need to exceed 7.5 percent of your adjusted gross income. This will change in 2019 to 10 percent and chances of future increases are eminent. To be qualified, you must follow policy regulations: For example your policy must offer inflation and nonforfeiture protection (even if not purchased) The policy must provide for daily living and cognitive impairment, but not medical necessities, such as insulin. There are many stipulations that are best discussed with your long-term insurance professional, as we donâ€™t want to confuse you with all of the ins and outs that will be fairly meaningless at this stage. The biggest tax advantage that we mentioned earlier is that your benefits are NOT included as income. As with all insurance policies, there are always exceptions.
Since 2006, states have been allowed to provide Partnership policies
Q: What is a Partnership Policy?
SINCE 2006 states were allowed to provide Partnership policies. Not all states have adopted these policies, but if you are living in a state that has set up such a program, consider it an option. Basically, it is a partnership between the state, participating insurance companies and consumers that meets the stateâ€™s requirements and the federal program requirements. Each policy must: Be tax qualified Include inflation protection Include a state-guaranteed asset protection feature You can purchase a policy for different types of facilities, such as Nursing Home or Residential Care only policies. Premiums are generally the same for both partnership and non-partnership. Just make sure the long-term insurance professional has been trained to recommend what is right for you.
Paying Off LTC Premiums Q: What Factors Affect the Cost of LTC Insurance? A: TYPICALLY, the following criteria are used to determine the costs: 1. Your age
The younger you are, the less expensive the premium.
2. Your health
The healthier you are, the lower the premium because you will be less risk to the insurance company. So if you have a chronic illness or disability prior to purchasing your policy, the premium will be higher.
3. The elimination
This is the length of time before you will actually use the policy. Longer elimination periods provide lower premiums. In other words, if you purchase your policy when you are 45 and the policy doesnâ€™t kick in until you are 85-years-old the premium will be much lower than if you purchase it when you are 65-years-old.
4. Length of benefit period
5. Inflation protection
This factor is based on how long you want the policy to cover your situation. You might choose five years of coverage or purchase a policy that covers your entire lifetime. The longer the coverage, the higher the premium. With the constantly rising costs of medical care, nursing homes and the like, it makes sense to include inflation protection in your policy. Many insurance companies offer two options: a compound inflation rider and a simple inflation rider. The simple rider is less expensive but doesnâ€™t have the higher annual inflation increases as that of the compound rider. Having neither, will result in higher premium costs.
The younger you are, the less expensive the premium
Q: What happens if there is a Failure to Pay the Premium? A: AS WITH MOST INSURANCE POLICIES, there is a 31-day grace period. If payment is not made within that time, you may or may not be approved for reinstatement. It is up to each insurer. If you have a non-forfeiture clause then you will be reinstated with a new application. If your nonpayment was the fault of an â€œimpaired brainâ€? then you will have 180 days to make the payments and bring the account up-to-date.
What Next? Well, for starters – TAKE CARE OF YOURSELF! Get a massage. Go to the gym. Eat right. Enjoy your work and your social life. Revel in your joy and eliminate worries. Invest in yourself and your future! Remember: Just like home, auto or health insurance – you may never need to file a claim. You never want anything to happen to your home, auto or health but it is pretty crucial to stack the deck in your favor by purchasing it. Right? So the question is… can you afford not to have long-term care insurance?
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This e-book outlines a Q&A for long-term insurance.