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                  Long Term Care Insurance
Guidebooks
The Health Insurance Association of America (HIAA) is the nation's most prominent trade association representing the private health care system. Its more than 290 members provide health, long-term care, disability, dental, and supplemental coverage to more than 123 million Americans.
 
 
 
Long-Term care - HIAA's Directory Members offering insurance for LTC
 
Q&A  - Long Term-Life Insurance
 
 
What does long-term care cover? 

A typical long-term care policy covers extended care regardless of whether the care is medically related to a specific illness or injury. According to the National Network of Estate Planners in Denver, a typical policy will pay for care "provided either in a nursing care facility or at home. In some cases, long-term care also extends to adult day-care centers and other community-based care facilities."
 
It is very important that you know which medical and ancillary expenses will be covered, because you'll want to choose a policy that reimburses you for expenses rather than one that pays you a flat daily rate (an indemnity policy).
 
The following expenses should be explicitly listed in your policy contract as covered: respite care, home modification, hospice care, caregiver training, professional health-care services, therapeutic devices, and personal care adviser and bed-registration fees if you are moving to a nursing home.
 
Is there any rule of thumb to determine if I should buy long-term care insurance?

Long-term care insurance can easily cost more than $1,000 a
year,  which is one reason some experts say you shouldn't buy the coverage unless you already have other types of insurance and cash to spare.  According to the National Network of Estate Planners, Denver, Colo.,  "Consumer and financial experts generally agree that long-term care insurance is a bad investment . . unless you will be able to pay the monthly premium with no more than 5% of your income.
 
If you can, and in addition to your home, you expect to have over $10,000 in assets and over $30,000 per year in income when you reach your 80s, then a long-term care policy with high benefits and compounded inflation protection might be a reasonable investment if you can find and qualify for a good one."
 
If I'm in my 30s or 40s, why should I be concerned about long-term care?

If your under 55, you cant be blamed if you consider purchasing a
long-term care policy a waste of money. After all, it may be a long time before you need long-term hospitalization or nursing care.  But just as with life insurance, its never too early to think about buying long-term care coverage.
 
Such insurance is much cheaper when your young because the insurer knows its unlikely you'll need to be hospitalized any time soon. For example, if you sign up when your 50, your annual premiums will be about 30% as much as those for a 75-year old, and you will be covered for 25 years more. In addition, its much easier to qualify for long-term care insurance when you are young.
 
All the application forms ask you about a host of medical conditions you may have experienced: If you answer "yes" to any one of them, your application may be rejected. But since most of those conditions develop only as you grow older, you probably haven't had them. Long-term care policies are good investments for some people and poor investments for others.  Being young doesn't automatically exempt you from deciding whether to buy such a policy.
 
From whom should I buy long-term care coverage?

If you decide to buy long-term care insurance, choose an insurance
company that will be financially strong enough to pay any claim you might make. Stick to plans offered by insurers who get the top financial ratings from independent rating firms. You can find ratings from both Standard & Poors and Duff & Phelps on the
Insurance News Network Web site.
 
You also want to be sure that your comfortable with the person who actually sells you the plan. According to the National Network of Estate Planners, Denver, "You should develop a reasonably high trust level with the person who presents a coverage plan to you.
 
You should feel that you have the ability to openly communicate your concerns and receive accurate answers to your questions. It would be beneficial for you to buy from a representative of an organization that can provide current and future service to you as questions or needs arise."
 
Another reason to build a lasting relationship with the person who sold you the plan is that you should review your coverage with the agent at least once a year. If your comfortable with the person, the review process will go more smoothly.
 
What is the typical premium for long-term care insurance?

A typical policy begins paying benefits 60 days after the onset of an
illness or injury that requires long-term care. Benefits may last for up to 50 months and are increased 5% annually to keep pace with inflation.
 
While there are a lot of additional variables that can affect premium rates, the biggest is ones age when the insurance is purchased. Typical current preferred rates are:
 
Age Annual Premium
40 $240
50 $460
60 $1,000
65 $1,550
75 $3,300
79 $6,150
 
A preferred rate is typically a 25% discount from a standard rate. If a couple applies jointly, many companies will automatically grant them a preferred rate. Single applicants can typically qualify for a preferred rate if they haven't smoked in the five years preceding the application, drive at least 1,500 miles per year and work or volunteer outside the home for at least 8 hours per week.
 
The above characteristics represent common provisions, benefits and rating procedures in the industry. However, keep in mind that each company will have its own unique policy and rates. Just make sure you understand what your buying and how much your are paying. Talk to more than one agent or, for a small fee, a financial planner will assist you.
 
Do I need a waiver of premium provision in my long-term care plan?

Nearly all long-term care insurance policies contain a provision that
waives the policy's premiums if you are eligible to collect benefits. After all, if your placed in a long-term care facility, your probably going to need every cent that you can save and you certainly wont be able to go out and work.
 
Be sure that any policy you purchase has such a provision. But also make sure you understand how the provision works. Some insurers will waive the premiums on the first day that benefits become payable. However, others require that benefits be paid for a period of 90 days before premiums will be waived.
 
Do I need an inflation-protection provision in the contract for my long-term care insurance?

Long-term care insurance is expensive, with a typical policy for people
in their 60s often costing more than $1,000 a year. But if you've decided to purchase such coverage anyway, its important to spend a little extra money to ensure that the benefits payable under the policy will rise each year to keep pace with inflation.
 
According to the National Network of Estate Planners, Denver, Colo., "If, as is often the case, you do not collect benefits for 10 to 30 years after you buy a policy, a benefit amount that now seems reasonable will be woefully inadequate when you actually get the care.
 
It is essential, then, that your policy provides automatic inflation protection -- not merely the option to buy added coverage. And the best inflation protection is compounded-meaning that the percentage increase is based on the immediately previous, not the original benefit amount.
 
Good inflation protection raises premiums, but without it, the policy may be a total waste."
 

 
If my spouse and I both purchase long-term care insurance, can we get a discount on our premiums?
 
If your married and both you and your spouse decide to buy a long-term health care policy from the same insurer, you could qualify for a hefty discount on your annual premiums. According to the National Network of Estate Planners in Denver, "most of the quality long-term care insurance providers allow a discount when both spouses apply for a long-term care policy.
 
The amount of the discount is typically from 10% to 15%. The insurance companies give this discount because spouses living together provide some custodial care that would otherwise be provided by outside sources.  Companies also find that spouses living together delay their entrance into a nursing care facility, preferring instead to be at home with their spouse."
 
How will my insurer determine whether I'm eligible for benefits under my long-term health-care insurance?

If you have long-term health care insurance and make a claim, your
insurer will likely look at six "benefit triggers" to determine if you can collect.
 
According to the National Network of Estate Planners, Denver, "The measurement devices, or benefit triggers, are known as activities of daily living. These activities are used to determine whether a person is capable of living independently or is dependent in some areas.
 
There are six commonly recognized activities: Eating, using the toilet, continence, bathing, dressing [and] moving about." Typically, a patient must be unable to perform two or three of those six functions in order to qualify for benefits under the policy.
Ask the right questions-What matters most are the policy benefit amounts and the specific terms of the contract. These policies are complicated, but if you ask these 15 questions, you'll come close to finding the best policy for you.
 
Long-term care refers to the services used by people who have disabilities or chronic (long-lasting) illnesses. Although these services often involve only personal care, they can also include the skilled care of a doctor, nurse, or physical therapist. The services may be needed for three months or for a much longer time. These services are available in a variety of settings, including (go to website).
 
Article indicates these are the things you should look for in a Long Term Care policy:

Make sure that any policy you are considering buying:

  • Does not require prior hospitalization to receive benefits.
  • Is guaranteed renewable as long as you pay the premiums.
  • This does not mean that premiums cannot be raised.
  • Offers a premium waiver while you are receiving benefits.
  • Has one deductible for the life of the policy.
  • Covers pre-existing conditions, without a waiting period,
    if these are disclosed when you apply.
  • Offers five percent (5%) compound inflation protection.
  • Allows policyholders to upgrade or downgrade their
    coverage if they can not afford premiums.
A number of factors influence the level of LTC insurance that is appropriate for you.  Selecting long term care insurance can be challenging, and mistakes can be costly. Find out why.
 
PRESERVING YOUR ESTATE WITH LONG TERM CARE (L.T.C.) INSURANCE
 

B.  Benefit Basics.

Says in part, click on above for entire article:   All new L.T.C. policies are either "guaranteed renewable" or "non-cancelable".  "Guaranteed renewable" means that coverage must be continued as long as you pay the premiums. You cannot be singled out for a rate increase, but rates can go up for a whole class of insureds. "Non-cancelable"  is not common. It means that your coverage and current rates are guaranteed.

Most policies have "level" premiums.  The
age of the insured when he/she applies for coverage determines the annual premium to be paid. Thereafter, the premium is "not supposed to" rise with the policyholder's age. However, premiums can go up if an insurer experiences more claims than it anticipated.

Most of today's policies also use the following criteria, any one of which
is sufficient to trigger benefits (more later):
 
- Medical necessity;

- Difficulty with two or more of the "activities of daily living" (ADLs);

- Cognitive impairment.

Fortunately, the trend in L.T.C. insurance is toward benefit flexibility in covering home health, alternative and adult day care, as well as traditional nursing home placement. Matching the benefit to the customer's needs and desires is a "win/win" situation. It is cheaper for the insurance company to pay to keep people close to (or at) home, providing only the level and amount of care really needed. Most people, of course, would prefer this anyway.

C.  Some things to consider in choosing a policy

A number of factors influence the level of LTC insurance that is appropriate for you. Selecting long term care insurance can be challenging, and mistakes can be costly. Find out why. 
 
Typical Long Term Care Benefits
 
Most (but not all) LTC insurance plans cover at least nursing facility and assisted living center services. This means that your policy would pay your daily benefit allowance for the length of your benefit period, which can range from two years to unlimited. Comprehensive LTC insurance plans may also provide benefits for community-based facility care, home health care, adult day care, and other services.
 
What LTC Insurance Does NOT Cover
 
Most LTC insurance plans have exclusions and limitations. They may not pay for medical conditions or health problems you had before you bought your plan, for example. Most will not pay for treatment that Medicare would cover or for self-inflicted injury. Care outside the U.S. may also be excluded.
 
 
An open and honest discussion can help secure the right kind of care at the right time. Here is some advice about how to get started.
 
RESOURCES
 
 
Each state has its own insurance department to oversee all types of insurance. The following offices are responsible for enforcing laws and regulations, and will provide the public with helpful information. Toll-free numbers are good for in-state use only. (Asterisk indicates no toll-free number.)
 
There are numerous resources for learning more about long term care and long term care insurance. Your local Area Agency on Aging and state insurance commissioner's office can provide information that is specific for your community.   Other resources include:
 
American Health Care Association; affiliation of long term care facilities and providers www.ahca.org 
 
American Association of Retired Persons; not-for-profit membership and advocacy organization www.aarp.org
 
Health Insurance Organization of America; trade association representing the private health care system www.hiaa.org
 
Consumer Advocate Informational Source providing a broad understanding of Long Term Care Protection www.mrlongtermcare.com 
 
United Seniors Health Cooperative; not-for-profit organization providing information and advocacy for seniors and elder care services