Learn about Long Term Care InsuranceDo you know what the future holds for you and your family? Of course not, no one can know for sure. What we can only be sure of is that we will die quickly or that we will die slowly. Long term care insurance is for those individuals who realize that they may not die quickly and in fact may linger for several dependent years.
We suggest that you print this page and look it over in due course. We have included quizzes, stats, and policy details that, in our experience, you'll find helpful when shopping for long-term care insurance. And if you have any questions, a specialist is just a phone call away, at 1-800-313-1921.
- Alzheimer's disease, Senile dementia
- Parkinson's disease, Organic brain syndrome
- Arthritis, Bone Fractures, Depression
- Cancer, Diabetes
- TIA's, Strokes
- Heart disease
What are your odds?
- Fact: Almost 50% of people older than 85 are afflicted with Alzheimer's disease.
- Fact: The life expectancy at age 65 for women is 84.9, and for men, it is 80.2.
- Fact: In 3 out of 4 couples (75%) at least one person will need long term care at some point in theri lives. ( Wall Street Journal.)
Take a brief quiz:
- What do you believe your chances are of living to your average life expectancy?_____%
- What do you believe your chances are of needing some long term care in your home or in a nursing home at some point before you die? _____%
- If you wrote that your chances were 25% or more, you should definitely continue on.
- If you wrote that your chances were less than 25%, STOP and ask yourself why you believe your risk is less than the rest of America's population?? Simply don't continue unless you have determined that your risk is similar to that of other people.
Do not "Crisis Manage" and try to solve the problem AFTER it happens, but have a plan.
- 65% of Americans surveyed believe they'll never need nursing home-care.
Read on for why this may not be true.
No one likes to think about on the chance of needing long term care in a nursing home, an assisted care facility, at home health care, in the community, or any other type of long term care service. It could be that's why so many people in the past did not plan for long term care.
Unfortunately, when it happened, their finances were caught off-guard. Families would "crisis manage" and when their Mom or Dad fell and broke their hip the kids had no idea where to begin to take care of their parent -- or how much it would cost the family out of pocket. If you don't want your family to crisis manage when you or a family member need long term care, consider the following questions before the problem occurs.
Ask yourself the following questions when you or a family member needs long term care:
- Where will you get your care?
- Who will manage and coordinate your care?
- How will you pay for your care?
Could your Nest-Egg (Savings) withstand the devastating Cost Of Care?
Today, most people are aware that Medicare pays very little for long term care and that Medicaid only pays when you are impoverished and have run out of money. What's more striking it the Health Insurance Portability and Accountability Act of 1996 makes it a federal crime to "knowingly and willfully" transfer financial assets in order to qualify for Medicaid coverage of nursing home and other long term care services. There is now a 5 year look back period that you would have to transfer the assets BEFORE you were to file for a Medicaid long term care claim...if not, Granny will go to jail.
One can only imagine that, if long term care is required, the money will come from the family's savings. Unfortunately, most people's savings could not withstand several years of long term care costs.
Perhaps that's why 70% of those in nursing homes nationwide are supported by Medicaid. Once on Medicaid, your choices for care are limited to only those homes that have voluntarily chosen to participate in this federal Medicaid government program. These nursing homes may not be the nursing homes you would necessarily prefer for yourself or a loved one. So, if Medicare and Medicaid won't do the job, what is your answer?
Is Long Term Care Insurance right for you and your family?
Seniors and Baby Boomers who purchase long term care insurance generally buy it because of one of the following reasons, but you may have your own reasons. What is your main reason for wanting long term care insurance?
Common reasons are:
- I do not want to be a burden on my children, spouse or family.
- I want quality care for myself or a family member and maintain my independence.
- I want to preserve my nest egg for my children or surviving spouse.
What is an affordable premium?
Long term care insurance is affordable if you can purchase the coverage without affecting your lifestyle or depleting your life savings. Would you agree with this statement?
Which of these four major risks have you insured?
- Home, fire, and burglary insurance?
- Automobile damage and liability insurance?
- Medical Insurance?
- Long term care Insurance?
Are you willing to risk your life's savings and nest-egg??
What risk, other than the cost of long term care, can you think of that could involuntarily wipe out your nest-egg?
If you're like most seniors and Baby-Boomers, long term care is the only other MAJOR risk that is left looming. Long term care insurance is likely the last major insurance you will ever have to cover and it is your most likely and potentially costly risk.
Where Should the Money Come From to pay your long term care insurance premiums?
If you are already depleting your life savings to maintain your lifestyle, long term care insurance is not for you. However, most of the seniors and Baby-Boomers are more frugal than their children and have set aside some emergency money, often called "rainy day money" or a "nest egg." Most have established a habit of reinvesting some, or even all of their interest they are earnings on their principal.
By now you should have concluded that the only catastrophic risk left that could involuntary destroy or severely deplete your life savings is the cost needing long term care. If this is true, wouldn't it be fair to say that your emergency money or rainy day money is really your long term care insurance as of right now?
Ask Yourself This Tough Question...
If you were to remain self-insured and you needed nursing home care or extensive home care, how long would your emergency savings last before it was depleted? _____ years.
OK, Long Term Care Insurance makes sense for your financial situation...what's the next step?
After you have determined where the money will come from to buy long term care insurance, you must decide from what company will you purchase it from? There are not many experts in the field, rather many financial advisers who sell it on the side. Ask most a question about the policy and you will probably know more than the financial advisor. Your best help will come from a full-time career specialist in long term care insurance like our LTCtree.com team who know about the industry inside and out.
There are four considerations you must make when purchasing long-term care insurance:
The Company: If the company you choose to do business with has not earned an A+ rating by A.M. Best (independent analysts of the insurance industry who base their ratings on financial position and operating performance), or has very little experience in long term care insurance, you may be the one to suffer. You must also feel comfortable that the company you choose will be around to pay your claim and not demand numerous rate increases over the coming years. So go with an A+ or better rated company.
The Policy: Policies vary tremendously from company to company. You may think you're comparing apples to apples but you probably not. Be sure you are getting the policy benefits you expect and you can do that by looking at at least the top 5 Long term care insurance carriers.
The Plan: Different agents offer different plans. It will be up to you to determine if the plans make sense. Does the plan take into account what the cost of care will be 15 years from now, or will you be stuck with paying a larger-than-expected share of the cost of care? Will you have to buy more coverage at a higher price to keep up with inflation? Will the plan pay for the average expected care a person your age is likely to receive before death?
The Price: The old saying "You get what you pay for" definitely applies in this case. Price is a function of how carefully a company underwrites, its profit objectives, and its willingness to increase the premiums on existing customers 5 to 10 years after purchase. If the company has had rate increases, or if it has only been offering long term care insurance for a few years, you would be smart to think that rate increases are down the road, especially if the premiums seem low now.
"The key to purchasing the right LTC policy is to find the balance between paying too much and too little for a plan. There are a lot of companies that sell LTC coverage, but only a handful that are quality in LTCtree.com's opinion. It is imperative that you shop around and get quotes from 3-5 companies. Choose a broker that works for all the top companies to get a true objective opinion. When deciding on the amount of coverage it is important to know the statistics like 92% of all claims on LTC are for 3 years or less. For example, unless your family has a history of Alzheimer's it might not be prudent to have a unlimited benefits period. Take you time and do your homework and you will find the right LTC policy for you."
Darrick Wilkins
Co-president of LTCtree.com
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