April 27

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Long Term Care Insurance

By Edward Givens

April 27, 2020


True or False: My health insurance plan will pay for extended long-term care services in the event that I need them in the future.

True or False: My medicare plan will pay for extended long-term care services in the event that i need them in the future.

The answer to both questions is FALSE.

If you develop a chronic illness or become disabled and can no longer care for yourself for an extended period of time, you’ll need long-term care services. The average cost for a home-health aide for an eight-hour day is more than $49,000 a year, while nursing care in a facility with a private room has a median cost of almost $98,000 a year. (Genworth 2017 Cost of Care Survey, conducted by CareScout)

A few reason to consider long-term care insurance: Allows you to stay at home or in a setting of your choice / Helps you maintain your independence and dignity / Can help protect your retirement assets or income / Helps relieve financial and caregiving pressure on your family

What kind of care can I get?

Home health care: Services provided at home
Assisted living facility: Residential care setting that provides housing and support services for people wanting or needing assistance with daily living tasks
Memory loss units: These units provide 24-hour support, and locked premises to assure that no one wanders off
Nursing home: Full-time care in a dedicated facility
Adult day care: Community-based, daytime supervision providing social, recreational or health assistance off-site during working hours

When will the policy start to pay?

Long-term care insurance policies begin to pay benefits when one of two different criteria is met and you have met the elimination period. You are unable to perform two of the six activities of daily
living (ADLs) without assistance or supervision:

Continence: Control of one’s bladder and bowel movements
Dressing: Clothe oneself
Toileting: Use a toilet and perform associated personal hygiene
Eating: Feed oneself
Bathing: Bathe oneself
Transference: Move oneself into or out of a bed or a chair

or You have severe cognitive impairment, such as Alzheimer’s disease and other forms of dementia, which make it impossible for you to live independently in a safe manner.

When looking at long-term care insurance policies be familiar with the following:
Daily/monthly benefit: The maximum daily or monthly amount your policy will provide toward the cost of long-term care.
Benefit maximum: The maximum benefit amount available under a policy (e.g., $360,000).
Elimination period: The waiting period before benefits are paid (e.g., 90 days). Opting for a longer waiting period is a good way to lower your premium cost.
Inflation rider: A provision that helps benefits keep pace with the increasing cost of care. See box below.
Shared benefits rider: A provision that allows a couple to share benefits between their policies. For example, if they each have $250,000 of benefits but one partner exhausts his or her entire benefit, that partner can begin drawing on benefits from the other partner’s policy.
Free-look period: A 30-day time frame after purchasing insurance, during which you may cancel for a full refund of your premium.
Guaranteed renewability: Your policy cannot be cancelled, and premiums cannot be increased unless all policies of that type within a particular state are increased together.
Care coordination benefit: A service where a professional may arrange, monitor or coordinate the necessary services.
Exclusions: Certain conditions are listed as exclusions for most policies including, but not limited as policies vary, to alcoholism, drug abuse, some mental illnesses and nervous disorders. Self-inflicted injury is also usually excluded from coverage.

Long-Term Care Insurance Linked With Life Insurance

Life insurance might be a priority for your right now. But as time goes on, your need for life insurance will likely diminish and the need to pay for long-term care may become a higher priority. Policies like this  allow you to serve both needs with one policy. You can buy a life insurance policy, but the policy would include long-term care coverage as a secondary benefit. If a need arises, you can access the policy’s long-term care benefits to pay for long-term care services. If you never need long-term care, there is a death benefit for your heirs from which you could take regular payments. These policies can be structured as a lump sum or an annual stream of premiums. 



Edward Givens

About the author

Working with me will allow you to have a healthcare plan that protects your health, your income, and your family. I'm a licensed health insurance adviser, entrepreneur, teacher, leader, and coach with 15 plus years of healthcare industry experience . I help small companies, professionals, individuals, and those eligible for medicare benefits design their healthcare plan to meet their needs and fit their budget. I'll be with you for the long haul. I'll assist you with education, selection, questions, and claims.

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