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Long-term care insurance: 5 big questions

11/28/2018

 
​This week, I’ll answer some common questions I receive about long-term care insurance.
​1. Who qualifies for long-term care insurance?
Not everyone qualifies.
​This is the toughest conversation that I have with people here in Napa, California.
​You can purchase long-term care insurance only when you are healthy and before you need it.
​Here is some sobering data from a study in 2007 by the American Association for Long-Term Care Insurance:
  • Your chance of being declined for a policy at age 50 is about 14 percent.
  • Your chance of being declined for a policy at age 70 is about 45 percent.
​Putting off purchasing long-term insurance is risky.
​2. What type of care is covered?
​Unlike Medicare and Medicaid, your long-term care insurance policy covers a wide variety of care options.
​Best of all, the government is not in charge of deciding what care you’ll receive.
​You are.
​Most long-term care policies also include coverage for a care coordinator to help you navigate the many options available.
​Instead of being told by the government what you’ll get, you’ll be part of the decision-making team.
​And you’ll have choices you may not otherwise have under government coverage.
​It’s more than just “nursing home coverage,” long-term care insurance coverage also includes:
​
  • Alternate care
​
  • Adult daycare services
​
  • Nurse, therapists, and home-health aids
  • Respite care (giving your caregivers a break)
  • Personal care services for activities of daily living
​
  • Homemaker help (shopping, meal preparation, housekeeping)
​3. Where can I receive long-term care?
​Long-term care insurance is designed to provide coverage almost anywhere:
​
  • Your own home
  • Assisted-living facilities
​
  • Licensed nursing homes
​
  • Other qualified long-term care facilities
​
  • International facilities for long-term care
​Long-term care insurance will let you decide where to get care.
​4. When does coverage begin?
​You qualify for benefits when you become chronically ill and are no longer able to perform two or more of these activities of daily living: bathing, dressing, eating, transferring, toileting and continence. Also, if you need constant supervision due to a severe cognitive impairment, you generally qualify.
Once eligible, your time-deductible begins. It’s called an elimination period and you can choose between 90 days and 365 days before benefits begin.
​5. How much does long-term care insurance pay?
​You get to choose your benefits.
​Once your elimination period (time-deductible) is satisfied, your policy will pay according to the two benefit options you selected:
​Monthly benefit: This is the maximum amount per month that can be paid. This can range from $1,500 per month to as much as $10,000 per month.
​Policy limit: This is the maximum number of months that you receive benefits. It typically ranges from 24 to 60 months.
​My advice:
​The benefit choices of elimination period, monthly benefit and policy limit affect your premium.
​You should work with your local insurance agent to help you figure out which choices make the most sense for you.
​If you don’t have a local agent, I’d be happy to answer any questions you have.
​I specialize in long-term care insurance. Send me an email or call me. I’d be happy to answer questions with no obligation.

Long-term care insurance: Do you need it?

11/14/2018

 
​Benjamin Franklin said, “In this world, nothing can be said to be certain, except death and taxes.”
​If that’s so, there’s another uncomfortable certainty for most of us... getting old.
​Thanks to modern medicine, a lot of us will live to a “ripe old age.” And that can be scary. We may need help with things. But many of us haven’t planned for how we’ll receive that help, and who will pay for it.
​Long-term care insurance is one way to plan for “who will pay for it.”
​What is long-term care?
​A person is considered requiring long-term care when they need ongoing help with several of the common activities of daily living. These are things we all take for granted when we are healthy.
These activities include bathing, dressing, eating, transferring, toileting and continence. Long-term care is also considered necessary when severe cognitive impairment such as Alzheimer’s and dementia is present.
​Long-term care can be provided in a number of ways, such as in a nursing home, adult day care, home health care, and other forms of assisted living. Long-term care as an industry has grown in flexibility with an emphasis on as much independent living as possible.
​What are your chances of needing long-term care?
​The numbers vary, but your chances of needing long-term care that costs money are really high.
​According to AARP, by the time you reach age 65, you will have a 50-50 chance of needing long-term care that someone will have to pay for. Other data sources put that number as high as a 75 percent chance.
​You may say, but Bruce, I know a lot of people over 65 who aren’t in a nursing home!
​That’s true.
But long-term care includes not just a nursing home, but all assisted care that costs money. And it’s expensive. Even a few short years in a nursing home at the end of life can destroy your life savings.
​The facts are stunning; most of us will need to think about long-term care sooner or later.
​How expensive is long-term care?
​According to Genworth’s Cost of Care Survey in 2018, it’s expensive. Here is data that shows average annual costs in our beloved Napa, California:
​
  • Nursing home, semi-private room: $119,000
​
  • Assisted Living Facility: $65,000
​
  • Home Health Aid: $60,000
​
  • It doesn’t take long for these costs to eat up life savings, retirement plans and equity in a home.
​How can long-term care insurance help?
​Just like all insurance, long-term care insurance is designed to protect your assets. At the end of your life, these assets are a legacy for your loved ones.
​Long-term care insurance pays the expensive bills so you don’t have to, and it protects the dreams you have for your children and grandchildren.
​My advice:
​If you have assets to protect, I first recommend having the discussion about long-term care with your loved ones. Then, have the discussion with your local insurance agent. Trust them to help.
If you don’t have a local agent, I’d be happy to answer any questions you have. I specialize in long-term care insurance. Send me an email or call me. I’d be happy to answer questions with no obligation.
    Picture

    Bruce Sackrison

    Napa, California
    (707) 931-018

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