Long Term Care Insurance

Alma, a young mother and wife, and her husband Patrice were at their wits end with the cost of caring for Alma’s ailing mother. To make matters worse the nursing home where Alma’s mother was receiving care informed her they would have to evict her mother due to lapsed payments. Alma was completely overwhelmed.

“I felt alone. The one person I would always run to for advice was no longer able to provide any. The bills were mounting and I knew it was up to me to make sure we were all okay. Now that her health was ailing I was suddenly the one who is responsible for her care. Patrice and I were totally blindsided by the enormous costs associated with my mother’s nursing home and the custodial care that weren’t covered by her health insurance. When I found out that neither Medicare or her health insurance were going to cover the costs, it made me sick to my stomach, to be honest, I knew our only option was to mortgage our house.”

Unfortunately, Alma’s mother did not have Long Term Care Insurance and the pressure to keep it all together fell on Alma and her husband Patrice; a young family getting their start in the world.

As technology and medical advances extend the average life expectancy beyond the current U.S. median age of 76 for men and 80 for women, the necessity for Long Term Care will also mature.

Health issues such as Alzheimer’s, Parkinson’s, and Stroke are just a few of the serious health concerns that can wreak financial havoc and eat through any resource supply people have available in a shorter time than many care to imagine.

Imagine then instead, the peace of mind knowing that your loved ones can aid and support you emotionally through your time of healing, rather than feel abandoned in a legacy of financial ruin.

Long Term Care policies help support the costs of Long Term Care beyond a predetermined period where health insurance, Medicare, or Medicaid are lacking.

At Meslee Insurance Services we advise our clients to put a plan in place for an extended health care event, whenever possible, to consider Long Term Care Insurance early while still in good health and financially stable. We do this in order to better prepare our clients and as an attempt to avoid an unfortunate situation where a health event occurs and insurance is no longer available.

Meslee Insurance works with you to answer your questions on cost, timing, care needed and the benefits of Long Term Care. Our licensed and experienced staff and will work diligently to find the best strategy for your particular situation regardless of age and taking into account your financials, age, and health conditions.

 

About Long Term Care

LTC Policies: Long Term Care insurance is a policy designed and developed specifically to cover the costs of long term care services that traditional health care policies do not cover. It covers a variety of services including assistance with activities of daily living as well as care in a variety of facility and community settings.

Long Term Care is not just for the elderly. In fact, did you know that of those who have long term care needs, 41% are under 65 years of age? If you think that you should wait to buy it, think again. To delay purchasing Long Term Care Insurance policies will costing more in the long run, especially considering if you are in poor health you may no longer qualify for long term care.

Long Term Care policies generally contain a benefit period or lifetime benefit maximum. Common benefit periods are two to five years but can also be offered for a lifetime. With long term care insurance, you pay the premiums in amounts you know in advance and can budget for; in return, the policy pays for the long term care you need when you need it. Furthermore, premiums are generally waived during the time you are receiving benefits.

There are many ways to secure Long Term Care coverage and some of these options are outlined below.

·       Individual Long Term Care Policy: Provide the largest LTC benefit for the fewest out-of-pocket-expenses. These types of policies represent the majority of long term care policies sold today. Similar to health insurance, these policies are designed to cover virtually all long term care services and are generally purchased with monthly, quarterly, semiannual or annual premium payments paid for the life of the insured

·       Rider to a Cash Value Life Insurance Policy: Another option that is often chosen, some individuals may choose to add a LTC rider to their life insurance policies. In these cases, the premiums can be split to pay both for life insurance and LTC insurance coverage. But beware; LTC riders differ from “accelerated death benefit” riders which do not apply to most long term care situations.

·       Either Or” Feature in a Life Insurance policy: Those who choose the “either or” feature on life insurance policies are entitled to coverage for long term care as well. However, it is important to understand that should long term care coverage be needed, benefits are paid INSTEAD of life insurance.

·       Integrated into a Single Premium Deferred Annuity: With this option, part of the earnings made on an annuity is used to fund the risk of long term care. So for example, if your annuity guarantees a rate of 6%, the insurance company will guarantee 4% and use the 2% to prepare for the possibility of long term care.

·       Combine LTC with Disability Income Policy: This option allows you to combine disability income policies with long term care policies. Generally speaking, any premiums paid before age 65 can only be used for disability but premiums paid after the age of 65 are used to provide long term care coverage.

General Types of Long Term Care Policies

·       Tax Qualified (TQ): With Tax qualified policies, premiums are tax-deductible on a federal level and benefits received are not counted as taxable income. Furthermore, benefit triggers are more restrictive and difficult to qualify for. For example, you must be chronically ill or be suffering from a long term physical, medical or disability-related condition. Also, you must show an inability to perform at least two activities of daily living for a minimum of 90 days and must require substantial supervision due to severe cognitive impairment.

·       Non-Tax Qualified (NTQ): With Non-Tax Qualified policies, premiums are not tax deductible and benefits are generally not counted as taxable income (The treasury department has not clarified the status of benefits and taxation thus far and this may be open to further interpretation). Furthermore, benefit triggers are less restrictive and benefits are much easier to qualify for. With NTQ policies, your doctor can state the need for long term care and the policy will pay. For example, medical necessity can be used as a trigger for benefits. Also, you must show an inability to perform at least two activities of daily living and must require continuous supervision due to cognitive impairment. 

Benefits & Rating Factors

·       Some of the benefits you can expect to receive with a long term care policy are:

·       Comprehensive home care, assisted living, adult daycare, respite care, hospice care, nursing home care and Alzheimer’s facilities.

·       If home care coverage is purchased, the policy will also pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse.

·       Assistance with activities of daily living (ADL’S) such as eating, bathing, dressing, toileting, transferring and continence. Coverage for personal care such as cooking, cleaning, laundry and bill paying are generally included as well

·       Offers peace of mind by generating an income stream to help cover the cost of care as opposed to relying on family or friends.

·       Premiums paid on LTC policies may be eligible for tax deduction and benefits received from a LTC policy are generally excluded from income.

Some of the factors that may affect rates are:

·       Age

·       Daily or Monthly Benefit

·       How long Benefits pay

·       Elimination period

·       Inflation protection

·       Health rating (standard, sub standard and preferred)

 Other information

·       For Tax- Qualified LTC Policies, the insured must need assistance for at least two of the six activities of daily living (ADL’S) in order for the policy to pay. The six activities of daily living are eating, bathing, dressing, toileting, transferring and maintaining continence. For Non Tax Qualified LTC Policies, the benefit triggers are less restrictive.

·       Please visit our insurance glossary tab for a full list of insurance terms and definitions.

·       There are many discounts available to help reduce your premium. Please visit our learning insurance discounts page to find out more information on how to maximize your savings.

*This page contains only a general description of coverages and is not a contract. Details of coverage or limits may vary in some states and by carrier. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements. 

*The newsletters and articles on this website are offered for general information and educational purposes. They are not offered as and do not constitute legal advice or legal opinions. The website contains many pages of hyperlinks to other resources on the Internet. These links are provided as citations and aids to help you identify and locate other Internet resourses that may be of interest, and are not intended to state or imply that Meslee Insurance sponsors, is affiliated or associated with, or is legally authorized to use any trade name, registered trademark, logo, legal or offical seal, or copyrighted symbol that may be reflected in the links. 

*All characters appearing in this work are fictitious. Any resemblance to real persons, living or dead, is purely coincidental.


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