FAQ’S About Long Term Care Insurance
- Who needs it?
- What is it?
- When should I buy it?
- Where should I get it?
- Why do I need it?
- How much does it cost?
- How do I buy it?
Summary: Those who purchase LTCI are usually people who like to plan things, who are relatively healthy and have at least some assets to protect.
Those who choose long term care insurance (LTCI) generally are people who like to plan things. People who don’t like to leave things to chance. They are also usually people who have assets to protect and have a reasonable income. Lastly, they are people who are still healthy enough to qualify for coverage and are within the age limits. Let’s look at each of these.
What do we mean by people who plan? We mean people who do estate planning. People who do wills and health care proxies and other thing like that. Those who don’t want their future left to chance. It is ironic that even many of these people have left a large hole in their planning by not addressing the most likely thing to happen to them before they die, long term care. Most people view themselves as needing care some day but haven’t done anything about it.
Even though many people look into LTCI, those that purchase it generally have some assets to protect. For example, most purchasers of LTCI own their homes, have a retirement account or savings/investments or deferred compensation. Others own their own business so that constitutes their asset. Further, most people if asked the question “Would you say that you are just getting by or doing fine” would answer, “doing fine”. In other words, they are not just scraping by. It doesn’t make sense to have to choose food or LTCI. The insurance should be affordable.
Finally, the big criteria: Are you still healthy enough to buy it. Every LTCI company does what is called medical underwriting. That means they will call you up and ask questions about your health or send a nurse to do a face-to-face evaluation and/or order your medical records from your doctor. So, what is healthy enough? It really depends. High blood pressure that is well controlled is probably okay. Combine that with a “little adult onset diabetes” and you have complicated the issue. Add an overweight condition and it is further complicated. Not impossible but more complicated. Could a person like this get LTCI? The answer depends on many questions. A professional LTCI representative can answer those questions over the phone. However, the LTCI representative never sees your medical records and they frequently contain surprises.
You must also be between the ages of 18 to 85. It should be obvious that the older you are the less likely you are to be healthy enough and the more it will cost. The average new LTCI customer ten years ago was in their seventies. Today the average is in their fifties. It is expected that the average will be in the 40’s before long and in fact many people in their forties are purchasing policies now.
Summary: LTCI is a form of health insurance that covers all or part of the cost of needing LTC in a facility or in your own home. There are several different types of coverage that can accomplish this including NY only policies and ones that cover couples as one entity.
Long Term Care Insurance (LTCI) is a health insurance policy that pays for the cost of long term care when it is needed. The Federal government defines long term care as needing help with two of six Activities of Daily Living (ADL’s) for 90 days or longer or needing supervision due to a cognitive impairment. The six ADL’s are: bathing, dressing, continence (bowel and bladder control), toileting (going to or from the bathroom, handling clothing and maintaining hygiene), transferring (getting in or out of a bed, wheelchair or chair), and feeding (not preparing food). A cognitive impairment is some form of dementia caused from things like Alzheimer’s.
Once a claim is approved it will pay for a claim based on one of two methods. The most common method is to reimburse you for expenses incurred that conform with a “Plan of Care”. A plan of care is usually defined by the insurance company. Many times there will be some expenses that will not be covered. So with this kind of coverage, you incur the expense first, submit the bills and fairly quickly get reimbursed by the company. The second type is call indemnity. This type of policy has absolutely no limitations or exclusions and is usable anywhere in the world. Once your claim is approved the company just sends you a check each month to be used as needed. Period. You use the money as you need to. Obviously, the insurance company is going to pay more money with the indemnity type so the premium is a little higher but it is probably well worth the extra expense.
In New York State there is a special kind of coverage that shares the liability between the insurance company and the State of New York by tying in Medicaid and guaranteeing asset protection. It has a limitation to NY State and is a good fit for many New Yorkers but not all.
Long term care is received in many different environments. These include nursing homes, assisted living, enriched living, adult homes, adult day care and home care. Those without LTCI frequently end up in a nursing home. Those with LTCI seldom do. They usually use home care where a person of your choosing comes to you and delivers care right in your own home. Many reimbursement policies will cover such things as; cleaning the house, mowing the lawn, taking you to the doctor, etc. but some companies will only cover your actual care and nothing else. Of course the indemnity policies have no restrictions on how you use the money. Figuring all this out is why speaking to a LTCI specialist is so important for you.
Summary: You should buy Long Term Care Insurance (LTCI) sooner rather than later and when you are still healthy enough to get it.
Younger is always better for several reasons. First, the younger you are, the more likely you are able to medically qualify. The average group LTCI buyer is 46 years old. The youngest stroke victim that we know of was three years old. Changes to your health can happen anytime to anyone. Second, the premiums are lower and as inflation happens you have to buy more dollars of coverage. Most policies offer inflation protection. If you delay your purchase, the cost of care will increase. For example, lets say you buy a policy at age 55 and pay for 30 years. If you wait until age 65, you may not be able to qualify. If you can qualify, you will have to buy about 75% more coverage and the raw cost is likely to be about 75% more. This will only be paid for 20 years but the net will be that you will pay more than double because you waited to purchase.
Does this mean that if you are 65 it’s too late? Of course not. People buy this into their eighties, it is just very expensive and many 80 year olds won’t qualify medically.
Think of long term care insurance as the last piece in your portfolio for financial stability and freedom.
Summary: your should buy from an expert in LTCI and from a company that is committed to LTCI and has experience in the market. Groups or employers are another option.
There are two parts to this question. The first part is whom do I buy it from and the second is what company. First, a licensed Long Term Care Insurance (LTCI) specialist is where you should look for help in making this purchase. Long Term Care Insurance Specialists are highly trained professionals that can bring great experience and insight to the purchasing process, because that’s their focus. Revet Long Term Care Agency, Inc. has only this type of person. Our motto is “to always do the right thing for the right reasons”. Let us send a professional to assist you.
The second question is what company to purchase from. Several factors play into this answer, one question is your health. You may have health conditions that only one company will accept. Certain types of diabetes treatment is an example of this. The type of policy is another factor, which has an impact on which company we might recommend. If you purchase a NY State Partnership policy, they are all pretty similar and the State backs them. In that case, you may want to just go for the cheapest policy. Also the choice of a reimbursement versus and indemnity type of coverage will be a determining factor. And a company with a financial rating of A or higher is where you want to be. Costs are pretty similar company to company if you compare apples to apples.
Summary: Long term care is paid for by you until you go broke. Once you go broke the Welfare system under Medicaid will make your choices for you. Medicaid doesn’t generally pay for home care.
It has been said that when it comes to paying for long term care you need to be rich, be poor or be insured. Why? When it comes to nursing homes, there are three ways to pay. Your health insurance will pay for a maximum of 100 days if you are recuperating and you are improving every day. Since nursing home stays typically last years not months and health insurance usually pays only about 20 days you can plainly see that this is not the answer.
In the northeastern part of the country nursing home prices range from about $75,000 to $110,000. Depending on whose statistics you want to believe and if they included those short recuperative stays, the average stay is somewhere between 2.5 and 4.6 years. No matter what the right duration of stay is you can see that an average stay will cost hundreds of thousands of dollars. Consider how long it took you to save that much money. But if you have enough money you can just pay for it yourself. This is the be rich part.
The other way to pay for nursing home care is to be poor and let Medicaid (medical Welfare) pay for it. The requirements for Medicaid are nasty and they will not pay for home care. Suffice it to say that if you are not poor, you won’t qualify for Medicaid. If you give away large sums to become poor they will, and have to, go after those assets. If you hide assets, they will find them. If you are truly poor, it is your only option and it’s a good one. Keep in mind that every nursing home looses money every day on every Medicaid patient. Nursing homes prefer private pay and by the way, they absolutely do not have to take you as a patient.
Insurance makes you a private pay patient. More important, you can stay home. For those without LTCI, about 25% of all people over 65 will spend at least a year in a nursing home. If you are a private pay patient you can go to the home of your choice. However, try this on for size. For those with LTCI, about 85% stay home, 10% go to assisted living and only about 5% end up in nursing homes! Clearly, people want to stay home and those with insurance do. Why? Probably because they are better informed of their choices and they have a policy that will pay for it.
Having LTCI helps you preserve your choices and independence, can allow you to stay home and if you do need to go to a nursing home, helps you be a private pay patient that they will want to admit.
Summary: You can purchase LTCI through a group affiliation, work site or individually. It is best to let an experienced agent help you.
There are a few different ways to buy Long Term Care Insurance (LTCI). Your employer may offer it or you may belong to a group that offers it. By far the most common way of buying long term care insurance is to have a one on one session with a specialist in LTCI who can help you consider what your needs really are. A professional agent can save you time, money, and be sure the coverage type is best suited to your individual needs.
We at Revet Long Term Care Agency have a staff of highly trained agents and office personnel that focus on the issues of LTCI only. We don’t try to be all things to everyone, just great LTCI agents. If you decide not to insure with the Revet Agency pick an agent that you know, like and trust and has some LTCI experience and let them guide you through the process. We find that most general agents while great at your other insurance needs don’t necessarily have a lot of experience in working with LTCI. We are available to help them at all times. We frequently work with attorneys, financial planners, accountants, other agents, etc..
LTCI is not something we recommend buying over the Internet. You really need to have an interaction with an agent. There are too many choices and decisions that must be made that can have a tremendous impact on your care 25 years from now. Let a professional agent help guide you through the process. Most LTCI agents will make an appointment to come to your home or business and will ask many questions and give lots of answers. Interestingly, most people buy their policy at the first meeting. We believe that is because you have all the information you need to make a decision by the time we are done. Remember that this is your decision to make. We can only assist you in taking action that is right for you.
Summary: This is an impossible question to answer because there are many variables. These include your age, policy design, health, company choice, state and so on.
This is one of the most frequently asked questions and one which is impossible to answer without asking and answering many questions. You see Long Term Care Insurance (LTCI) rates are based on a number of factors including your age, marital status, and health. Further there are many different options within each and every policy. Add to that there are several different kinds of policies. Each is designed for different circumstances. So you can see that any person at a particular age could have hundreds of different prices. Don’t be discouraged though, just as you would sit down with your attorney or financial planner for your options in planning your will or portfolio choices, so should you sit down with your long term care insurance specialists to discuss your options.
So how much does it cost? Again, there are many factors that go into the cost of your policy. Long term care insurance is not a cookie cutter issue the plans are all based on your individual needs and wants. For the answer to this you really need to speak to a professional LTCI representative. At the Revet Agency each agent is a highly trained specialist that will help you figure out what your individual needs are as well as help you decide if this is even right for you. We believe you, as the client should make an informed, knowledgeable decision regarding your long term care coverage. Speaking with a knowledgeable professional who offers quality products is the smart way to answer the question to how much does it cost.
The Revet Agency currently has customers that pay as little as $650 per person per year or about $50 per month. We also customers that pay well over $10,000 per year.