The answer depends on your individual needs and circumstances. Buying LTC insurance is part of a planning process for life and retirement. You need enough income to pay the premiums for the rest of your life regardless of premium increases or life changes, such as the death of your spouse. You need to consider how long the benefits should last in relation to the premium you will pay. Most people with modest resources may be better able to pay for a policy with 1, 2 or 4 years of coverage rather than one with benefits that last as long as they need care. Also, if you have few assets, it may not make sense for you to buy LTC insurance. Other options for paying for LTC include investments, savings, home equity credit and reverse mortgages.
What is best for one person may not be good for another. The benefits and amount of coverage an individual or couple needs depends on their unique circumstances. A single or widowed woman may need very different benefits than a married man, particularly if their economic circumstances are different. Women are more likely to live longer than men and more likely to live alone at the end of their lives. Without family members willing to provide some home care and support services, women are more likely to receive LTC in a nursing home or assisted living facility.
Companies that sell LTC insurance in California vary widely. Some have decades of experience, while others are relatively new to the market. Some are large companies with many other products and subsidiaries; others are smaller and specialize in LTC insurance. Some that have sold LTC insurance in the past have recently stopped selling these policies, leaving fewer companies from which to choose.
Rating services such as AM Best and Standard and Poor provide information to help you evaluate the financial strength of companies that sell LTC insurance. The State Insurance Commissioners for each state usually publishes data showing which companies have raised their LTC insurance premiums during the last 10 years, the amount of the increase and which states were affected.
Yes, however, your policy's definitions of the places and people that provide LTC services may differ between states. For example, the assisted living facility definition in your policy may be unique to your current stat, and may not accurately describe assisted living facilities in other states. If you move, you should contact the company that issued your policy to understand what services and facilities will be covered in your new home state.
Not necessarily. Although companies base their premiums on age (the older you are, the more you will pay), the difference in premium from one year to the next may not be significant. If the only reason you are buying a particular policy is to lock in a lower premium, you may not know enough about the policy. If you are feeling pressure from an agent to make a decision before you fully understand the product just to save a few dollars, you should find another agent. Professional LTC insurance agents understand that this type of policy is one you will have for the rest of your life, and it's important that you understand how it works and be comfortable with the decision you make. It's always a good idea to bring along a friend, relative or other advisor when you meet with an insurance agent to discuss buying an LTC policy.
Fortunately, no. The way claritylifeins was built was specifically to engineer a solution that would eliminate this problem for consumers. Since we are an independent broker, that means we work on your behalf, not the insurance companies. We represent virtually all of the highest rated Medicare Supplement and Final Expense life insurance carriers in the marketplace and are not biased toward any specific one. Our systematic approach is to search through all your options in the marketplace from all of the carriers in order to find you the highest rated, most suitable and best priced insurance options available.
This is an individual decision, based on many factors. Most people think about LTC insurance when they are close to retiring. Others buy it through an employer much earlier. Premiums are much lower for people in their 40s and 50s than for those over age 65. In addition, as people age, they are more likely to develop health conditions that may make them uninsurable. After age 60, premiums for LTC insurance begin to rise steeply. On the other hand, LTC services and places where people receive care are changing, and may not be the same services or places described in an LTC policy purchased 40 years earlier.
In general, yes. Inflation protection should be included in every LTC insurance policy because these policies pay a fixed dollar amount for each day of care. Most people are buying these policies decades before they will need care. A fixed daily benefit loses buying power each year. In 14 years, it will only pay for half the care it pays for today, while the cost of care continues to inflate each year. The difference between the LTC insurance benefit and the cost of care will come out of your own pocket. Inflation protection will help your benefits keep up with inflation. As the number of people needing care grows, the competition for caregivers and care facilities will fuel cost increases.
Not necessarily. Having an LTC insurance policy may not keep you out of a nursing home if that is the only place that can provide the appropriate care. Around-the-clock care at home is generally more expensive than nursing home care and may require more than one caregiver. If you have a comprehensive LTC insurance policy, it should provide you with protection in any setting, including care at home, in assisted living facilities and in nursing homes. While most people prefer to receive care at home, they may have no choice if their condition requires care in a facility.
Either by each expense or by a set dollar amount.
Policies vary and may cover nursing home care, home health care, personal care in your home, services in assisted-living facilities, services in adult day care centers and/or services in other community facilities.
Insurance policies cover different types of facilities. If your facility is not covered, the insurance company can refuse to pay for eligible services.
Most policies usually do not pay benefits for a mental or nervous disorder or disease, other than Alzheimer's or other dementia; alcohol or drug addiction; illness or injury caused by an act of war; treatment the government has provided in a government facility or already paid for; or attempted suicide or intentionally self-inflicted injuries.
A policy may have a maximum benefit limit or a daily/monthly benefit limit.
Some policies use more than one way to decide when to pay benefits, while some states require certain benefit triggers. Benefit triggers may include:
The inability to do activities of daily living such as bathing, continence, dressing, eating, toileting and transferring (most common benefit trigger).
Cognitive impairment/mental incapacity
Doctor certification of medical necessity
Prior hospitalization. Most companies no longer sell policies that require a hospital stay, although Medicare requires a three-day hospital stay to be eligible for Medicare payment of skilled nursing facility benefits.
Most policies have a waiting period, or elimination period, of 0, 20, 30, 60, 90 or 100 days before benefits start.
There are several ways to pay for long-term care. These include:
• long-term care insurance,
• long-term care riders attached to a life insurance policy or annuity,
• accelerated death benefits from life insurance, and
• personal cash, savings, or other liquid assets.
Medicaid is a state and federal assistance program that pays health care and long-term care expenses for eligible people with low incomes.
To qualify for Medicaid, you must meet income and asset guidelines. Assets are cash and the things you own -- such as cars and stocks -- that you could convert into cash. Many people pay for long-term care with their own money until they become eligible for Medicaid. To learn more about Medicaid eligibility, call your local Area Agency on Aging.
Medicare may pay some long-term care costs. Medicare is a federal program that pays for health care for people over age 65 and for people under age 65 with disabilities. If you meet all the necessary requirements for Medicare, it will cover up to 100 days of skilled care in a nursing home, per benefit period. Medicare pays the full cost for the first 20 days and then requires you to pay a copayment for days 21 to 100.
Life insurance or annuities can provide for long-term care services in two ways:
• An accelerated death benefit provision in your life insurance policy that may allow you to receive part of your stated death benefit to use as you choose, including long-term care.
• A rider that you buy to add on to your life insurance policy or annuity that provides coverage for long-term care.
Long-term care insurance helps provide skilled care or personal care and may help you to preserve your assets against the high cost of an extended long-term care need. Long-term care insurance usually makes sense if you have more assets than a house, car, or a small amount of cash that you want to save
It might be difficult for you to buy a long-term care if you use most of your to pay for utilities, food, or medicine.
To qualify for Medicaid, you might have to pay for your care out of pocket until you spend down your assets to meet the eligibility requirements.
To decide whether long-term care insurance is right for you, consider your personal risk factors, assets, income, and available alternatives.
Consider the following factors before buying long-term care insurance:
• Life expectancy. The longer you live, the more likely you will need long-term care. Consider whether your family has a tendency for long life expectancy.
• Gender. Women might need long-term care insurance more than men because they usually live longer.
• Your family situation. If you have a spouse, adult children, or other family members who can care for you at home, you might not need a policy that pays for home health services. Instead, you might want to consider a policy that pays only for nursing home care.
• Family health history. You may have a greater need for long-term care if chronic or debilitating health conditions run in your family.
Long-term care insurance is typically less expensive if you buy it when you're younger. Consider talking to a trusted financial adviser for help deciding whether long-term care insurance meets your needs. Ask yourself the following questions about your finances:
• What are my assets (not including my home, car, and $2,000 cash)? Will they change over the next 10 to 20 years? Are my assets large enough to justify the expense of a long-term care policy?
• What is my current annual income? Will it change over the next 10 to 20 years? Will I be able to afford the policy if my income decreases or if the policy premiums go up significantly?
• If I retire, how will retirement affect my ability to pay premiums?
• How much does the policy cost? Will I pay the premiums from my income, savings, or investments? Will my family help with the cost?
• How much will the policy premium increase if I wait until I'm older to buy a policy?