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Frequently
Asked Questions
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Q. What is Long Term Care?
A. Care given when you are unable to perform normal activities of daily living or when you need assistance due to a cognitive impairment. This care lasts more than 90 days.
Care can be administered:
- At home
- In an Adult Day Care Center
- In a residential care facility
- In an Assisted Living or Alzheimer's Facility
- In a Nursing Home
Q. What is Long Term Care Insurance?
A. LTC insurance is a contract between you and an insurance company. In exchange for premium payments, the company promises to pay you a specified benefit to cover all or part of the cost of long- term care.
- Coverage can be purchased to cover your stay at home or in a facility.
- The amount the insurance company will pay depends on the benefits you purchase.
- The length of time the insurance company will pay depends on the benefits you select.
Q. What are the chances I will ever need Long Term Care?
A. Statistics show that nearly one half of all seniors will require some Long Term Care during their lifetime. "The age wave is mounting: 33 million Americans, an unprecedented 13% of the population are over age 65. Their ranks will more than double by 2030. The number of Americans 85 and older has nearly tripled since 1960, to 4 million, and will more than double over the next 30 years." *
Risks we insure for:
Home- 1 in 1,200 chance that your home will be destroyed by fire
Auto- 1 in 240 chance that you will have a liability due to an auto accident
Health- 1 in 15 chance you will incur a major medical expense
Long Term Care- 1 in 3 chance you will need Long Term Care
Q. What is my financial risk?
A. Medicare covers less than 5% of Nursing Home costs; Medicare Supplement insurance does not cover LTC costs and Medicaid will pay only if you have depleted your assets. **
A year in a nursing home now averages more than $40,000.00 and can exceed $100,000.00 in certain parts of the country. ***
Your true financial risk is any amount of care that has not been insured.
Q. What are my options?
A. Medicare and Medicare Supplement insurance.
If you are admitted into a Medicare approved facility AND have been hospitalized for at least 3 full days:
Medicare may pay the first 20 days in a skilled nursing facility and perhaps even pay a portion of the following 80 days; for a total of 100 days. Beyond 100 days, Medicare pays NOTHING.
www.hcfa.gov/medicare/mcarpups.htm
Medicaid?
In order to qualify for Medicaid you must use up most of your assets. Your choice of facilities and level of care is limited and Home Health Care is not covered.
Each State is now mandated to have its own recovery program. "Federal law requires that states recover assets form a Medicaid recipients probate estate-(the property owned by the individual in his or her own name) States can go further though, and many do, to make claims against other property in which the patient had an interest. That includes property held jointly with right of survivorship, joint bank accounts and pay on death accounts. Even a surviving spouse's estate can be at risk if it includes assets that the deceased spouse had an interest in, but that are protected from recovery so long as the survivor is alive." ****
www.hcfa.gov/Medicaid/mcaicmsn.htm
Personal Assets?
Nationwide, long term care costs average over $48,000a year. A 5- year stay would average somewhere in the neighborhood of $244,000.
Costs vary dramatically from state to state www.newlifestyles.com
Many who wish to leave a legacy for their children or grandchildren, would fall short of their goals if faced with personally financing a long-term care stay.
Relatives?
According to a study conducted by the National Center on Women and Aging, "two-thirds of those who act as care givers for elderly relatives lose out at work by forgoing promotions, pay raises and training opportunities"
Another study reported in Boston's From Time to Time showed that the average loss to a family member turned caregiver is $659,139 in wages, pension and social security benefits. 69% of caregivers reported arriving late or leaving the workplace earlier than normal. 67% reported taking time off during the day to attend to an elderly dependent and nearly all respondents reported making frequent work and lifestyle sacrifices both large and small.
Long Term Care Insurance
"Purchasing Long Term Care insurance is a highly personal decision. For most healthy people who can qualify, it should be part of an overall retirement plan" *****
Only Long Term Care Insurance can guarantee that you will not burden family members with the financial and emotional stress related to providing for your care.
Q. What Features should I look for in a Long Term Care Policy?
A. Long Term Care coverage is relatively new, and policy language is not as standardized as it is in many other types of insurance policies. The policy pays a specified dollar amount as a daily benefit, but the benefit amount is only one of many important features. It is vital that you know which policy features are important to you and make sure your policy provides them.
- Guaranteed Renewable
- Waiver of premium
- Coverage should provide for Assisted Living Facilities, Alternate Care Facilities and Alzheimer's facilities.
- Inflation protection. Protection against the rising cost of care.
- Good Benefit Triggers with a definition for substantial assistance.
- Home Health Care Options
- Financially strong and experienced company.
Q. How much coverage do I need?
A. Policy benefits range form $40 to $200 a day. How much you need depends on the costs of care in your area and how much you want to pay from other resources i.e. income and investments.
*Time
Magazine, "Taking Care of our Aging", August 30, 1999
**Business Time, June 1997
***WS Journal, March 31, 1999
***** Kiplinger's Personal
Finance Magazine, Will Nursing Home Bills Haunt Your Estate?, April 1999
*****Kiplinger's, July 1999
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1999, 2000, 2001 LTCi Pros |
