On the previous page you saw that after 100 days (or after you stop improving) your health insurance and Medicare can stop paying. Once these benefits end you must either pay yourself or apply for Medicaid, or spend down your money until you qualify for Medicaid.

Long term care insurance is designed to cover the gaps in our health care system. If you don't have much cash, investments, or assets to protect then long term care insurance may not be for you, more than likely if you need long term care you will be on Medicaid (welfare).

If you do have savings, a pension, or assets - you will pay yourself of use long term care insurance if you already have it. Insurance is only available before you need care, you can only get long term care insurance if you can health qualify.

If you can't health-qualify for standard long term care insurance or if you have been declined you can get an annuity with long term care benefits. There is no health-underwriting. This is a fixed annuity and not a risky variable annuity. Call or email us to find out more about the annuity with LTC benefits.

Health Insurance/Medicare & LTC Insurance

Long term care is not necessarily long term. You may be laid up for only a few months recovering from an accident, surgery, or illness. Because of advances in medicine people are now using their long term care insurance multiple times.

Almost all long term care is "custodial care" which is basically help with Activities of Daily Living or ADLs* — like dressing and bathing. Custodial care is not covered by health insurance, Medicare, Medicare Supplement Insurance (Medigap), or Medicaid.

Where you can receive care:
Long term care insurance generally covers care whether at home or a facility (assisted living, nursing home, Alzheimer's facility). In fact there are very few limitations to where one may receive care as long as you qualify for benefits and can find someone to provide care.

What types of care is covered:
Long term care insurance can cover all types of home and community care including home health care, personal care, homemaker services, adult day care, and other fee based community care. Insurance also covers care at assisted living or residential care facilities, and skilled nursing facilities or nursing homes, including Alzheimer's facilities.

Other benefits often included in long term care insurance are:
• An allowance for special equipment or home modifications to make your home safe.

• Couple can qualify for a discount. Others may qualify for a couples discount if they share living expenses and are the same generation (siblings, partners, friends).

• Caregiver training that professionally trains an unpaid caregiver.

• Respite care that provides a professional caregiver a few weeks a year to give the unpaid caregiver a break.

• Bed reservation in case you have to go to the hospital from the facility.

• International coverage if you plan to live outside the U.S.

• Premiums are waived when on claim.

• A professional care coordinator to help set up and manage your care needs.

If you've ever had to or known anyone who has had to arrange and manage long term care, you'll appreciate the use of a professional care coordinator. They are usually a local nurse who is independent of the insurance company and is paid to make sure you get whatever you need for your care. This takes a tremendous burden off the spouse, family or friends.

How do I qualify for benefits?:
To qualify for long term care insurance benefits usually a medical professional needs to determine that you need assistance with at least two of the six Activities of Daily Living* (called ADL's) for at least 90 days, or that you are cognitively impaired. Often if you cannot do one ADL, you cannot do two, for example bathe and dress. The Activities of Daily Living are: Dressing, Bathing, Eating, Transferring, Continence, Toileting.

Like "good driver" rates with car insurance, long term care insurance has poor, good and better rates depending on your health. Once you're insured you're covered even if your health changes. The younger and healthier, the lower the premium.

So how much does long term care insurance cost?
It totally depends on the benefits the benefits you pick, you decide what your premium will be.

There are five main factors that determine the premium and you pick four of them. They are shown in the chart below: Age, Daily Benefit, the Benefit Term (also called Benefit Period or Benefit Multiplier), the Elimination Period (deductible), and any riders.

We can know two factors, your age and daily benefit. We can't know ahead of time how long you'll need care for (Benefit Term).

The daily benefit is based on what care cost in your area. If you don't know what the cost of care is in your area you can find out by calling care agencies, assisted living and nursing facilities. This will give you an idea of how much of a Daily Benefit you might need. Long term care insurance comes with inflation protection that increases the daily benefit to keep up with costs.

Deciding on the Benefit Term or how long benefits pay is more difficult. You should consider factors such as your past and current health, your family health history, averages and statistics, and the premium, to determine the right benefit term.

 Lifestyle Preservation – LTC insurance will maximize the potential of what you have accumulated over your lifetime so you can feel good about the future.

Why not get unlimited or lifetime coverage? It's expensive and you probably won't need more than a few years of care. The average amount of nursing home care needed for men is 2.2 years and for women 3.5 years. If home care and assisted living is included maybe an average of 3-4 years of care for most people. The average LTC insurance claim is 3 years. Exceptions are care needed for conditions such as dementia and Alzheimer's, crippling arthritis, etc.

You can decided insure for the entire risk or for part of the risk for a lower premium. Other factors that determine the premium are: state of residence, deductibles, and riders. There are hundreds of possible combinations to determine a premium but the majority of people choose an average policy which range from $150-$500 per month, still way below the out-of-pocket cost for long term care of $3,000-$7,000 per month.

The amount of long term care insurance money you will have available is based on how much is in your "pot of money" and not on your benefit term. When you apply for insurance you choose the benefit term or number of years you want coverage for 2,3,4,5, or more years. Insurance companies use a multiple of days to determine how much insurance the person is buying. 2 years=730 days, 3 years=1095 days, etc.

For example a policy with coverage of $150 per day for 3 years would have a long term care insuance "pot of money" of $150x1095=$164,250. If the person went on claim right after buying the policy they would have $164,250 available to them and if they used the entire $150 per day it would last 1095 days or 3 years, if they only used $100 per day they would have $50 left over every day, then the $164,250 would last longer than 1095 days.

Most people get inflation protection that increases the daily benefit on the anniversary of the policy and the most common increase is 5%. With compound interest the daily benefit doubles in about 14.5 years and with simple interest it doubles in 20 years. This means that the "pot of money" also increases every year. The $150 doubles to $300 per day in 14.5 years so in 14.5 years they would have $300x1095= $328,500 in their "pot of money" and if they used $300 a day it would last 3 years and if they used less than $300 a day it would last longer.... if they only used $150 out of $300 a day then the $328,500 it would last 6 years.

Also see Partnership policies that provide asset protection, available in most states.

Once you get a policy there is a very good chance that you will be paying the same premium the rest of your life or until you need care since premiums stop once you are on claim. It's cheaper over one's lifetime to buy young. Starting your long term care insurance at age 60 rather than 55 will cost thousands more and every year it gets more expensive.

Why does long term care insurance cost what it does?
All insurance is based on risk. The Government Accounting Office reports that half of us will need long term care? In comparison, your home has a 1 in 1,300 chance of being destroyed. What if half of the houses in your neighborhood were at risk, how much do you think homeowner's insurance would cost? Would anyone not have homeowners insurance?

Ironically, few would sleep comfortably without homeowner's insurance even at such low 1:1,300 odds, but are willing to risk a 1:2 gamble that they will not need long term care. 

So why do people put off insuring?
For those who can afford insurance it's denial as a way to cope. They do not want to think about getting old and needing care so they do not plan for it.

Some people put off insuring with the argument "I can self insure." But they won't hesitate to put a quarter in the parking meter even though they could easily "self insure" the parking fine. They're willing to risk $250,000 but not $50. They do this because they do not understand the odds. 

When you request a quote we won't know your financial situation or how much you want to insure for so we will provide a quote for an "average" policy for your age and state of residence. You can always request a new quote for specific benefits.

We also get requests from people who already have long term care insurance and either want to compare, replace, or supplement their existing policy.

When shopping for a policy you need to consider what you will be getting when you go on claim and some policies were sold without enough coverage, without useful riders, or in some cases with too much coverage. We will evaluate your current policy at no charge.


Next Your choices today.