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Archive for the ‘Long Term Care Insurance’ Category

Quite often, people have a tendency to get confused about this subject. When people are asked how they plan to protect their assets and income in case of a long term care situation, almost every time answer is the same; “Well I have a disability insurance…”

Confusion starts with the definition of Disability Insurance where people get Short Term Disability and Long Term Disability confused with Long Term Care. There is a distinct difference between the two insurance plans and in order to have a better understanding of the difference, we need to know what each insurance vehicle offers as protection.

We’ll start explaining what Disability Insurance offers without going into too much detail as in Long Term or Short Term Disability: In a nut shell, Disability insurance provides a portion of your income for a certain period of time when you are disabled while you are employed. What this means is when you get disabled, you may receive up to 40, 60 or maybe 80 percent of your total income for a specific period of time. Further more, this also means two things:

(1) You are not going to receive any supplemental income for the cost of your care through your disability insurance; all you are going to receive is the portion of your income.

(2) You will receive a portion of your income for a specific period of time. When this period is over, your income from your disability insurance will seize.

So you can actually see that the benefits of Disability Insurance are very specific and limited. Nevertheless this simply doesn’t mean that Disability Insurance is not a valuable protection plan. When you learn the benefits of Long Term Care Insurance, you should be able to understand that the two protection plans take separate and important precedence in our lives.

Before we get into the benefits of Long Term Care Insurance, we need to clear out one misconception about this insurance plan; Long Term Care Insurance is not necessarily some insurance plan that you purchase to get care when you are older, and it is not particularly a nursing home care either. People get into Long Term Care situation in younger ages too and Long Term Care Insurance is a great protection plan that provides many valuable benefits.

Among many of these benefits, of course the most important one is to provide funds for your care when you are unable to do some of your daily activities. This is actually the main difference between this plan and the Disability Insurance; Long Term Care Insurance does not provide income or any portion of your income, it actually pays for the cost of your care up to certain amount which is determined within your policy. In other words, Disability Insurance provides you a portion of your income where Long Term Care Insurance actually pays for the cost of your care. Now you can see the importance and the complimentary nature of the two insurance plans; while you are receiving a portion of your income through your Disability Insurance – which is always less than your regular income, you will also have your Long Term Care Insurance paying for the cost of the care that you are receiving.

Considering the present high cost of care, and having to pay for it with a limited income may become an enormous financial burden. This is one of the most important reasons why these two insurance plans exist. It is also as important and highly recommended that you should consult an insurance professional who can coordinate and design these policies according to your specific personal needs for your full protection.

Remember, you must protect the most important asset in your life: Your Earning Power!

More Long Term Care Insurance Articles

The younger you purchase a policy the more likely that you will pay less, not only in the short term, but over the course of your life.  If you have a policy and pay the premiums, you are guaranteed coverage for life.  An important concern with these polices is the ability to continue to afford the policy both today and into retirement, so dealing with a company that specializes in long term care can be very beneficial.

The opportunity to purchase long term care insurance can be limiting.  There are several medical conditions that disqualify individuals from obtaining this type of coverage.  Most experts advise their clients to start investigating long term care insurance plans in their early 50’s.  Today, the average age of a person buying long term care insurance is 57.  At age 50 the premiums for long term care insurance typically increase at a rate of 5-8% per year.  As a person ages, the likelihood of not qualifying for long term care increases; as an example, a 65-year-old has a 25 percent chance of not being eligible for long term care insurance.

Long term care insurance can help protect a family.  If there are assets to protect, the family should take the time to visit with a long term care insurance specialist.

Ask yourself, how will you pay for a long term care event that costs ,000 to 0,000 per year?  What would that do to your families assets?  Who would be your caregiver and can they afford to take the time to care for you?  Many people, after looking at the statistics and the costs associated with such an event, realize the importance of such a policy sooner rather than later.

There can be several advantages for business owners.  In addition to asset protection, business owners of all sizes have the opportunity to receive tax deductions on their personal taxes by purchasing long term care policies.  Long Term Care Insurance is considered health insurance and taxed the same way with limitations on deductibility based on age.  We encourage you to sit down with your CPA and talk about all of the tax incentives of this product.

Most companies provide payment options that allow you to pay off your policy.  There is typically a “10-pay” option that usually costs four times the annual premium, but after 10 years, the policy is paid-off.  Another option is a “pay to age 65.”  This is a great option if you want to pay the plan off by the time you retire or if you are a business owner, this can be used as an incentive to keep a key employee.  The cost of the “pay to 65” plans varies based on attained age.  Either of these plans “10-pay” and “pay to 65” allow you to pay the policy off early versus until benefits are used or deceased.  Once the policy is paid-off the insurance companies can not increase your premiums over time.

In summary, it is very important take the time to sit down with your loved ones and let them know your plan.  Will your plan consist of a long term care policy or will you tell them that “they are your plan!”

Ask the difficult questions:

-          Who will be the caregiver?

-          Do you want a choice on where you will receive care?

-          What assets do you want to leave your children?

-          Can I afford to wait to buy this policy?

-          Have you talked with friends that have experienced a long term care situation personally?

Determine how many assets you would be willing to liquidate if you have a long term care event.  The fact is that approximately 50% of us will at some point need long term care.  Remember, if you do not have a long term care insurance policy your choice is to pay for the care out of your own assets and self-insure.

Tom Lothrop

Western Long Term Care, LLC

By Larry Lane for www.InvestorZoo.com

Thanks to new medical breakthroughs and new drugs, we as a population are living longer and more active lives. In 1900, the life expectancy of the average American was 47. Today, there are more survivors of cancers and diseases that were previously considered incurable. Depending on when you were born, you can expect to live to 76 to 91 years old.

However, all this technology comes with a dual edged sword. The longer you live, the longer you’re going to have to stretch out your retirement dollars. According to Genworth Financial, the cost of long term care can vary from ,000 per year in Louisiana to ,000 in California. Remember this is in 2009 dollars. Unless you’ve had your head in the sand for the last 20 years, you know about the skyrocketing costs of healthcare. The cost of long term care needs to be factored in as one of your retirement expenses. In general, the pundits will say you need 75-80% of your current expenses in retirement. Long term care insurance may be the wild card in your retirement plans. If you are 5, 10 or 20 years out before retirement, no one knows what the cost will be for long term care insurance.

Here are just a few statistics about where we’ve come as a country and how long we can expect to live:

The fastest growing age group in the country

Those ages 85 and over- Federal Interagency Forum on Aging-Related Statistics. Older Americans 2004: Key indicators of well-being, Federal Interagency Forum on Aging-Related Statistics. Washington, DC: U.S. Government Printing Office, 2004.

70% of couples can expect at least one partner to need nursing home facilities after age 65

Of the older population with long-term care needs, about 30% (1.5 million persons) have substantial long-term care needs (three or more ADL limitations). Of these, about 25% are 85 and older and 70% report they are in fair to poor health. The Henry J. Kaiser Foundation. Long-term Care: Medicaid’s role and challenges [Publication #2172]. Washington, DC: Author, 1999.

In 2004, the average daily rate for a private room in a skilled nursing facility was 2 for a private room or ,080 annually, and 9 or ,685 annually for a semi-private room. The hourly rate for a home health aide was .12.

In 2000, annual cost estimates were ,000 for adult day care and ,300 for assisted living

The average length of stay for long-term care nursing home residents is 2.43 years. Source: CDC, National Nursing Homes Survey

We’ve now established you need long term care insurance. LTC insurance is inexpensive if purchased at a young age. As with most forms of insurance, it is cheaper when you don’t need it .Think of it this way, you don’t have tornado insurance on your house. That day, you hear the weatherman call for a 100% chance of a category 5 tornado. In a panic, you call your insurance agent who quotes you an astronomical price. If you would have purchased tornado insurance last year, your premiums would have been much lower. The same goes with long term care insurance. If you purchase it when you don’t need it, you’ll save money in the long run. A 65 year old will pay more for insurance than who starts to purchase their insurance in their 40s.

Long term care policies are sold by independent insurance companies, usually in conjunction with a life insurance policy. There are no standardized versions of a long term care policy. Benefits differ from company to company. Some offer to pay a fixed dollar amount for each day you receive care. Others only pay a percentage of the cost, or a pre-specified dollar amount to cover the cost of services. There also may be waiting periods before the insurance policy is placed into effect. It pays to shop around and compare. Not all long term care insurance policies and companies are the same.

As always, do you due diligence and most importantly get insured. Not only does it make good financial sense, but it will allow you to sleep soundly at night.

Genworth Financial is a great source for long term care insurance:

http://www.genworth.com/content/etc/medialib/genworth_v2/pdf/ltc_cost_of_care.Par.41652.File.dat/Cost of Care Maps_gnw.pdf

Larry Lane is the editor for www.InvestorZoo.com, a social networking site specializing in personal finance

The article above is information of a general nature and the information provided may not apply to your personal situation. Please consult your financial planner or licensed professional for investment advice.

Related Long Term Care Insurance Articles

There is a vast difference between health insurance and long term care insurance. While health insurance will cover you medically up to a certain point, there is generally a cap.  This means that if you go over that cap, you are no longer covered.  If something should happen where you need long term care, you can get long term care insurance that will pick up where the health insurance leaves off. 

 

As more people are living to be much older than ever before, there is a demand for long term care.  Many people get to a point where they are no longer able to care for themselves and need to go to a nursing facility where they can get long term care.  This even applies to those who may become disabled or have a long term illness.  When you have long term care insurance, you are covered in case you happen to need this type of care for rehabilitation or even indefinitely.  There are many policies out there to protect you that can go along with your health insurance as well. 

 

In the case of someone needing long term care, the rule of thumb is to first exhaust any health insurance benefits that they have in order to pay for their care.  It is important for people to carry health insurance so that they can get the medical care that they need should they become ill or require hospitalization.  No one knows what the future may hold, and the better your health insurance, the more choices you have when it comes to the quality of care that you can get.  You should make sure that not only you, but your family members are also covered by health insurance.  You can get plans that are for individuals as well as family plans from many different insurance companies that offer cheap solutions to health care coverage. 

 

If you or a family member needs long term care, the long term care insurance will cover this type of care that can go on for an indefinite period of time.  This includes care in a nursing facility if a person is unable to care for themselves.  This enables someone to be able to have a better nursing facility for long term care if they are carrying long term care insurance.   This also gives a person better care for themselves as well. 

 

Those who are interested in taking care of the health of themselves as well as their family, and also not exhausting all of their money should they need long term care or have to go into a hospital should look into getting good health insurance as well as long term care insurance.  This is not as expensive as people think and there are many plans out there that are very affordable, even for families.  Those who want to make sure that they and their family are prepared for the unexpected should look into quotes for health insurance as well as long term care insurance that they can easily find online.  They will find that the peace of mind that they have by carrying this insurance is well worth the cost of the premiums, which can be a lot less than expected. 

Related Long Term Care Insurance Articles

Article by Noura Depp

Few costs are not covered by traditional or medical insurance, which includes expenses of long term care services. Hence, it explains the introduction of Long Term Care Insurance. This includes cover for daily activities that can include anything like eating, bathing, dressing, nursing facility, etc. necessary for extended health care.

While taking a long term care policy, you can select from a wide range of services you need to insure. Consequently, the amount of the policy depends on the type of service you want to cover, your age, term of insurance, or any other optional benefits you want to include.

However, people suffering from some health diseases or those who are already enjoying a long term care insurance, cannot avail another policy.

People generally believe that other kind of insurances will pay for their long term care costs. However, let’s go into the details and find out how is Long Term Care Insurance different from other insurances.

Medicare covers expenses incurred in a nursing care facility only. Moreover, it is for a limited period. On the other hand, Medicaid too, doesn’t cover long term health costs. It is just another welfare program.

People enrolled under long term care insurance are covered for a very long term, generally for a lifetime. However, the insurance offers varied plans ranging from 2, 3, 4, 5, or unlimited years.

However, there are few risks involved while going for such insurance. Hence, make sure you avoid them.

If you are buying this insurance for the first time, it is very likely that you could pay more than necessary. Hence, before you actually pay for such plans, contact more than a couple of companies and compare the prices. It is suggested that you go for a three year long term care insurance because most of the companies will extend you coverage if you don’t make full use of the cover.

Like health insurance, the early you buy this insurance, the less you pay for it. However, you cannot avoid the risk of price rise, which is a common policy by companies providing long term care insurance. Hence, you may get lower interest rates but prices will definitely hike.

It is also likely that your claim could be denied. This happens when the companies couldn’t hike rates. They know most of the old and sick people wouldn’t fight back. Hence, when you claim, they deny reimbursing the amount and pocket the money paid by you. So, it is advisable to read the policy, including fine print, very carefully and know the list of services they cover.

The policies of long term care insurance were written in 1980′s. Hence, most of the companies haven’t even witnessed the “maturity of policy” period. Some companies are taken over by the other, while some have wound up. So, it becomes quite important to take a policy from a big brand.

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