Long-Term Care Insurance

Is it really possible to have your cake and eat it too?

Although medical treatments and technology seem to have made it possible for people to generally live longer than they used to, have you ever noticed that during those “Golden Years”, many of our loved ones really struggle just to be able to take care of their everyday activities (eating, dressing, toileting, bathing, medicating, etc.)?  Many people are faced with Assisted Living or Long Term Care, in order to see them through these later years of life, but they either lack the resources or the desire to pay the substantial expense of getting such long term care.

It may be possible to couple a life insurance policy with long term care needs, in a way that can assure you that you will ultimately receive the benefit of your policy premiums, either in the form of insurance death benefits, or long term care benefits, or possibly both.

Traditional Long Term Care Policies

Traditional Long-Term Care policies are offered through private insurance companies. They specialize in providing care for someone with a prolonged physical illness, a disability or a cognitive impairment (such as Alzheimer’s disease) often needs long-term care. Long-term care is different from traditional medical care. Long-term care helps one live as he or she is now; it may not help to improve or correct medical problems.

Long-term care services may include help with activities of daily living, home health care, respite care, hospice care, adult day care, care in a nursing home, or care in an assisted living facility. Long-term care may also include care management services, which will evaluate your needs and coordinate and monitor the delivery of long-term care services.

What type of long term care insurance is available?

Depending on the type of policy, long term care insurance may provide benefits for eligible long term care services received in the home, a community based setting, an assisted living facility or a nursing home.

What features do I need to consider?

Daily Benefit Amount: This is the maximum amount a policy reimburses on any day that eligible Facility Services and/or Home and Community Based Services (HCBS) are received.

Benefit Period: This determines how long your long term care insurance policy will provide benefits.

Total Benefit Amount: The Total Benefit Amount available over the life of the policy is determined by

your choice of benefit period and the Daily Benefit Amount.

Elimination Period: This is the number of days that you must receive either Facility Services or HCBS (if covered under the policy) before you start receiving benefits under a policy.

Inflation Protection: Inflation affects costs in all areas of our lives, and long term care is one of them. This feature is critical if your coverage is to keep pace with rising costs. The inflation protection feature, which may have an additional premium cost, helps assure that your policy will hold its value over time.

Life Insurance Policies

Some companies let you use your life insurance death benefit to pay for specific conditions such as terminal illness or for qualified long-term care expenses such as home health care, assisted living or nursing home care. A life insurance death benefit you use while you are alive is known as an accelerated death benefit. A life insurance policy that uses an accelerated death benefit to pay for long-term care expenses may also be known as a “life/long-term care” policy. It may be an individual or a group life insurance policy. The company pays you the actual charges for care when you receive long-term care services, but no more than a certain percent of the policy’s death benefit per day or per month. Policies may pay part or all of the death benefit for qualified long-term care expenses. Some companies let you buy more long-term care coverage than the amount of your death benefit in the form of a rider.

Types of Benefit Triggers

Activities of Daily Living. The inability to do activities of daily living, or ADLs, is the most common way insurance companies decide when you are eligible for benefits. The ADLs most companies use are bathing, continence, dressing, eating, toileting and transferring. Typically, a policy pays benefits when you cannot do a certain number of the ADLs, such as two of the six or three of the six.