Long Term Care

Should I buy long-term care insurance?

In today’s economy, the costs associated with nursing homes or assisted care facilities can wreak havoc on your financial stability. In some cases, these costs can consume a lifetime of savings and planning. There are many reasons why you might consider purchasing a long term care insurance policy.

Four key reasons to buy long-term care insurance:

1. Preserve your assets for your family instead of spending the money on long-term care.

2. The odds are one-in-three that a man over 65 will need long-term care; for a woman over 65, the odds are one in two.

3. New rules make it hard to qualify for Medicaid.

4. Premiums may be partially tax-deductible

Typical policy features

The most comprehensive policies pay for care in a variety of settings such as: nursing home, assisted living facility or at home. Benefits are typically expressed in daily amounts, with a lifetime maximum. Some policies pay half as much per day for at-home care as for nursing home care. Others pay the same amount, or have a “pool of benefits” that can be tapped as needed.

Eligibility triggers

Make sure you are aware of when the benefits will start for your particular policy . The policy will outline what benefits will be paid once certain conditions are met. These conditions can include the following:

1. The inability to perform two or three specific “activities of daily living” without help. These include bathing, dressing, eating, toileting and “transferring” or being able to move from place to place or between bed and chair.

2. Cognitive impairment. Most policies cover stroke, Alzheimer’s and Parkinson’s disease, but other forms of mental incapacity may be excluded.

3. Medical necessity or certification by a doctor that long-term care is necessary.

4. A waiting or “elimination” period must be met.

Optional Features

1. Restoration of benefits. This feature ensures that maximum benefits are put back in place if you receive benefits for a time, then recover, and go for a specified period (typically six months) without benefits.

2. Nonforfeiture benefits return a portion of premiums or keep a lesser amount of insurance in force if you let the policy lapse. This provision, required by some states, adds to the cost of the policy.

3. Guaranteed renewable policies must be renewed by the insurance company, although premiums can go up if they are increased for an entire class of policyholders.

4. Waiver of premium, so that no further premiums are due once you start to receive benefits.

Please contact us for more information or to request a free quote today.