Tag Archives: long term care

Long term care insurance: Who needs it anyway?

How do I know if I would be a good candidate for long-term care insurance?

Long-term care insurance is a gamble, as is the case with most insurance. If you end up needing years of supervision and care, then long-term care insurance was a good buy. If you die suddenly, never using any sort of personal or nursing care, than it was a waste of money. And you always need to remember, that no policy covers all of the cost. There will always still be some bills to pay even with long-term care insurance.
As you or your loved ones begin to consider long-term care insurance, you should beware of pushy salespeople and scare tactics. The costs are high and the fear is great, so make sure not to buy in a panic. Many people simply should not bother with purchasing long-term care insurance. Agents get enormous commissions (often 50% of the first year’s premium and another 10% for every year after that) so they have plenty of incentive to sell these policies. You need to think long and hard before considering this as a worthwhile investment.

Long-term care insurance helps to protect assets and preserve the inheritance for heirs. However, it’s very expensive and never covers the full cost of care. So, who are some of the individuals who should consider buying a long-term care insurance policy?

Individuals with ample assets. The primary reason to buy long-term care insurance is the protection of an individual’s assets in excess of the cost of long-term care. If your parent or loved one is believed to become eligible for Medicaid within approximately 12 to 18 months of entering a nursing home, you should probably not consider this as a viable investment. Nursing home costs vary significantly from area to area, so you should look at the cost within your specific area. Just as a rough guideline, you may consider long-term care insurance if your parent has at least $100,000 in assets (not including his house and personal belongings).

Those with ample income. If your parent can afford $300-$600 per month in premiums without affecting their lifestyle, they may consider long-term care insurance. Some experts have suggested that this type of coverage should not cost more than 5% of a person’s total income, which may be a pretty good guideline to follow. Also, will they be able to continue paying the long-term care insurance premiums if they rise or if your parent’s income falls. You need to keep in mind, if your parent fails to pay premiums, their policy will be canceled; so they should not even start this type of coverage unless they plan to continue it.

Those whose assets and income are not overly ample.
People with a large income or more than $1 million in savings, generally don’t need long-term care insurance as they will be able to pay for their care out of pocket. However, they might still want it in order to protect their assets for heirs or perhaps just for little peace of mind.

How do I know if I would be a good candidate for long-term care health insurance?

Long-term care health insurance is a good buy for various individuals as described on the previous page. Long-term care health insurance is also preferable for people who fall within the following categories:

Those who are likely to need long-term care. Although you can never be sure, you will have to make an educated guess if you will be an individual likely to eventually need long-term care. After the age of 60, the likelihood of needing a nursing home at some point in time is approximately 40%. The average length of stay is about 2.5 years. However, 45% of nursing home stays are for three months or less, with the majority being less than one year. However, 10% of people who enter a nursing home are there for five years or more. Another 30% of older individuals end up needing assisted-living care, or a significant amount of assistance at home.

So, what does this actually tell you? It means that at some point in time you or your loved one have a relatively high probability of eventually needing a nursing home, assisted living or homecare, but, for perhaps not for more than a year or two.

You can also refine your probabilities of whether or not your loved one may need an expensive nursing home by considering their health and family history. If they have a family history of sudden fatal heart attacks, then they may be less likely to need extended nursing home care then say a person who has a family history of Alzheimer’s disease. Are they a smoker? Do they exercise? How is their mother’s bone density? All of these factors play a role in how much care an individual may need some day.

Another factor in considering whether someone is a good candidate for long-term health insurance is; “Do they have a lot of family support, a wealth of local volunteers, and inexpensive services on which they can rely or do they live in a community with little in the way of social services?” If your mother lives near your sister, who is retired nurse with time on her hands, she is less apt to need nursing home care then a person who lives alone, far from family and other sources of social support.

Those who have no plans of entering a continuing care retirement community. Continuing care retirement communities as they are referred to, usually charge large admission and monthly fees, but they usually provide almost all the care that will be necessary, from assisted-living to nursing home care. Having long-term care health insurance would be redundant and not necessary in these circumstances.

By Paul Susic Ph.D. Licensed Psychologist

Health Insurance 101 for Senior Citizens

Adequate health insurance is becoming one of the most precious assets that one can have. Certainly, health insurance is a huge priority to most senior citizens. Protecting your health and making sure that you have access to adequate medical care is one of the most important things that you can do to make your life active and fulfilling. It is quite obvious that accessible health care is not always affordable to everyone in the United States. Recent publicity about Medicare reform has made it clear that this is especially true for our nation’s seniors. This web page will seek to be a primer for senior citizens in relation to some of the basics on health insurance for your daily needs.

Health insurance types:

There are various different kinds of health insurance. While each has different requirements and is run by different entities, it is important to understand that many individuals combine several types of insurance coverage to meet their needs. It may be confusing to deal with all of these different types of health insurance coverage, but we will seek to explain them in basic detail. The three different types of insurance which will be discussed on this page are Medicare, Medicaid, and private health-insurance policies, which will each be described briefly on this page then covered in more detail on subsequent pages.

Medicare health insurance:

Medicare is a federally funded health insurance plan designed to help pay for senior citizen’s health care needs. It basically has two parts, Part A, which covers hospitalization and Part B which covers outpatient services such as doctors visits. You are usually eligible for Medicare just prior to your 65th birthday.


Medicaid as a health insurance program ran by your state government in conjunction with some financial assistance to your state by the federal government. It is a program developed for low income individuals (which may include seniors) and was originally intended to be an insurance of last resort. Many people have heard some information about “spending down to Medicaid”, which means that a person must use up most of his or her assets before they may qualify.

Private health insurance policies are usually provided by employers or are purchased by individuals. These policies are provided by private health insurance companies and premiums are paid for by employers, employees or by other insured individuals. Some of these private health insurance policies are referred to as Medigap policies, which means that they are designed to specifically covered things in which Medicare does not. Long-term care insurance is a private insurance plan purchased specifically to cover the costs of assisted living and nursing home care, which will be covered on separate pages of this web site.

By Paul Susic Ph.D Licensed Psychologist Senior Care Psychological Consulting

Choosing The Right Long Term Care Insurance Policy

When you are considering long-term care insurance, or LTC insurance, there are many things to consider as you try to choose the best policy to match with your personal circumstances.

First of all, you should begin considering coverage at the earliest possible age. Most LTC providers only underwrite people who are between the ages of 40 and 80 and who don’t already have impairment to their ability to perform at least five of the six basic Activities of Daily Living, or ADLs. So if you are at least 40 and healthy right now, the time is now to consider buying LTC insurance, as the younger you are when you take out a given policy the greater your amount of options and the lower your premiums.

If you are now considering LTC insurance, it’s important for you to know the features and benefits you want to possibly pay for.

First, consider how comprehensive you want the LTC coverage to be, which will affect your premiums. For instance, do you want to just cover going into a nursing home, or just home-based health care provided by a nurse, or just adult day care, or a mixture of them or all of them?

Another factor that will affect your premiums is how much daily or monthly coverage you want. The more coverage you select the higher your premiums, but remember if you do need to activate the policy and your future costs are greater than the limit you have selected you will be directly responsible for making up the difference to the health care providers. Also consider whether or not you want a lifetime cap or unlimited lifetime coverage in sum total insurance policy payouts, based on the options available to you based on your age at the time of application.

Still another factor is benefit period. Most policies offer benefit period limits of anywhere from two to six years, but you can also pay to have a lifetime benefit period. Along with this, you’ll have to consider the duration of the elimination period (analogous to the “deductible” on other types of insurance). During the elimination period ALL accrued medical expenses that the LTC policy covers are paid out of your pocket. It is possible to have a zero-day elimination period, but your premiums will be quite high for this. Most policy providers’ elimination periods won’t exceed 100 days.

The longer this period the lower your premiums, all other things being equal, so this is one area where you can save quite a bit of money on premiums if you are relatively young, as you can reasonably expect to have enough money saved and invested in the future to finance one of the longer elimination period options should the need arise.

Also ask the insurance agent about an inflation protection feature. This will be very important especially if you are younger, what with health care costs constantly on the rise. Imagine what would happen to you if you selected a comprehensive coverage limit of $100 per day and 20 years from now you need to use the insurance but that same amount of medical care now costs $1000 per day!

Finally, one thing in an LTC policy that can substantially raise your premiums (even double them) BUT be extremely important is called the Non-Forfeiture Benefit. This feature will allow you to continue receiving the policy’s benefits even if you stop paying the premiums. If you are severely debilitated or financially destitute from paying your part of the medical expenses and aren’t able to pay the premiums in the future, this benefit could literally save your life or prevent your children from going bankrupt taking care of you.

About the Author:

Andrew Long writes for a series of websites about Care insurance and health related issues. A main area of expertise and content covers long term care insurance policy and disability insurance policies, as well as healthcare insurance

Article Source: http://www.ArticleBiz.com

Long Term Care Insurance Policies: Selecting the Best?

How do you go about selecting the long term care policy that is best for you?

As with in choosing any other product, you always need to compare several long-term care policies to find the one that best suits your parent or loved one’s needs. You may need to contact your state insurance department to find out which companies provide long-term care policies in your area. Another option may be to add a rider onto a current health insurance policy. Several companies offer free quotes through the mail or over the Internet. You may do a search on the Internet using “long-term care insurance” to find some of these companies.
It is not easy to compare long-term care policies. They vary in so many ways- when they come into effect, what they cover, how benefits are paid etc… You should ask to see an “outline of coverage” detailing a long-term care policy’s benefits, costs, restrictions, and limitations.

When reviewing long-term care policies, you should be sure that any special features are worth the price paid in higher premiums. Additional coverage of any type will add substantially to the cost. You should not simply consider what your parent or loved one wants and then get quotes. You should compare the basic packages with the more expensive policies, see what each item adds to the price of the policy and then determine if it makes sense to pay the higher premium.

A growing number of employers are now offering long-term care policies to employees, retirees, and sometimes employee’s parents as well. Usually this means discounted premiums (they’re often paid for with pretax dollars). The federal government is now offering long-term care policy options to most federal and U. S. Postal Service employees, active and retired members of the uniformed services and their spouses, and adult children (employees can also get insurance coverage for their parents, parents-in-law and step parents). For more information about the federal program for long-term care policies you should go to www.ltcfeds.com or call 1-800-582-3337.

Even if your employer offers a long-term care policy option, look at other plans and compare. Just because the company has a group plan that includes long-term care policies doesn’t mean it’s the best option for you or your parent.

What do you look for in a long term care insurance policy?

You should look for the following features in shopping for a long-term care insurance program:

A solid company. You should look for a well-known, stable company with a good reputation. Buying from a strong company is absolutely essential because the long-term care insurance field is still young and companies have little history in which to base their underwriting assumptions. A strong long-term care insurance company will be better able to absorb errors in estimates.

It is also a pretty good idea to check the company’s rating with Standard & Poor’s (www.standardandpoors.com) Moody’s (www.moodys.com ) or A.M Best (www.ambest.com). You should look for one that falls within the top two categories related to their financial strength.

You should ask the company how long they’ve been providing long-term care health insurance. A company who has been in the market for a while (perhaps 10 years or more), will be more experienced and their rates will be more stable.

It’s also worthwhile to call the state insurance department, which may have information about complaints that have been made against particular insurance companies.

You should always be especially suspicious if a salesperson tells you that the state will guarantee coverage if the company goes into default. The premiums may be higher for these long-term care insurance policies, and if the company fails you can count on the fact that the coverage offered by the state will not be as generous as the original policy.

Tax qualified. Most long-term care insurance policies are qualified, but you should still check and make sure that they are. “Tax qualified” means that a policy conforms to the 1996 Health Insurance Portability and Accountability Act, or HIPAA. What this actually means to you is that the benefits cannot be taxed, also, a long-term care insurance policy must be qualified if someone wants to deduct the premiums as “medical expenses” from their taxes. (These expenses must be greater than 7.5% of a person’s adjusted gross income).

Comprehensive coverage. “Facility-only” policies cover only one type of care, usually nursing homes. Most long-term care insurance policies, however, offer “comprehensive” coverage. These policies should cover care in a nursing home or assisted-living facility, as well as care provided at home, adult day care, hospice care, and even respite care. It makes more sense for most people to buy a comprehensive policy, which gives them more and broader options in their long-term care insurance coverage.

Some other important features of a good long-term care insurance plan include:

Early eligibility. It is important to look at when a policy holder becomes eligible for long-term care insurance benefits. You must find out what the “benefit triggers?” are. Most long-term care insurance policies kick in when a person cannot handle two or more “activities of daily living” or ADL’s. These include bathing, dressing, eating, getting from a bed to a chair, toileting and being incontinent of bowel and bladder. A good policy should also cover issues related to memory or cognitive impairment such as different forms of dementia, that will necessitate some level of supervision. Some will cover care which is deemed “medically necessary” such as when an individual with congestive heart failure may require home care.

A reasonable deductible period. Most long-term care plans have a waiting period (called a “deductible” or “elimination”period), which means that the policy does not really go into effect until a person has paid for care themselves, for a certain number of days. The longer the waiting period, the cheaper the long-term care policy.

A waiting period of less than 20 days will usually make a policy much more expensive. On the other hand, waiting periods of more than a hundred days, greatly reduce the chance that an individual will ever put the policy to use. A reasonable amount of days to wait is usually between 30 and 40 days.

Adequate reimbursement. Most long-term care policies pay a fixed amount for each day of long-term care, and then you pay the remainder. The benefits usually run in a range of between $50 and $300 a day. Of course, the higher the amount of the benefit per day, the higher the cost for premiums.

Home health care is usually covered at a rate of about 50% – 60% of the rate that it will cost your loved one to be in a nursing home or assisted-living facility. So in effect, a policy that pays $100 a day for nursing home care will usually pay about $50 a day for home health care.

In order to determine how much long-term care coverage your parent needs, figure out how much they can afford to spend on long term care (or is willing to pay). Now find out the average cost per day of nursing homes in your area. If a nursing home costs $160 a day and your loved one has an average of $70 of daily discretionary income, then they need a policy that offers at least $90 a day in coverage. Also, you need to keep in mind that nursing home rates will continue to climb, while your parent or love one’s income may not. Finally, it’s always important to remember that the rates paid for nursing home care do not include some expenses, such as drugs and supplies and the cost for additional services such as professional mental health and medical services.

By Paul Susic Ph.D. Licensed Psychologist