Long Term Care Insurance

The average American life expectancy is now approximately 75 for men and 84 for women and nearly half of us will spend at least part of these extended years in long term care conditions. If you have experienced or know someone who has experienced Alzheimer’s, Parkinson’s or other serious health issues, then you surely know about the cruelty and financial devastation that comes along with it. Long Term Care policies can help support the costs of long term care beyond a predetermined period where health insurance, Medicare, or Medicaid are lacking. More importantly, make sure that you do not leave your loved ones with the burden of medical costs and care associated with long term care. It is important to look at obtaining Long Term Care Insurance early because once a change of health occurs, insurance may no longer be available. Meslee Insurance will work with you to answer your questions on cost, timing, amount of care needed and benefits of LTC. Our licensed and experienced staff and will work diligently to find the best LTC policy available regardless of age, current health conditions and other factors. In 1994, 7.3 million Americans needed LTC services. By 2000, this number rose to 9 million and it is estimated that by 2030 the number of individuals needing long term care will increase to 23 million! Give us a call today to ensure that you have the proper coverage for what is becoming increasingly inevitable.

About Long Term Care

LTC Policies: Long term care insurance is a policy designed and developed specifically to cover the costs of long term care services that traditional health care policies do not cover. It covers a variety of services including assistance with activities of daily living as well as care in a variety of facility and community settings.

Long term care is not just for the elderly. In fact, did you know that of those who have long term care needs, 41% are under 65 years of age? If you think that you should wait to buy it, think again. Waiting to buy long term care insurance policies will surely end up costing you more in the long run, especially considering that if you are in poor health you may not even qualify for long term care anymore.

Long term care policies generally contain a benefit period or lifetime benefit maximum. Common benefit periods are two to five years but can also be offered for a lifetime. With long term care insurance, you pay the premiums in amounts you know in advance and can budget for; in return, the policy pays for the long term care you need when you need it. Furthermore, premiums are generally waived during the time you are receiving benefits.

There are many ways to secure long term care coverage and some of these options are outlined below.

•  Individual Long Term Care Policy: These types of policies represent the majority of long term care policies sold today. Similar to health insurance, these policies are designed to cover virtually all long term care services and are generally purchased with montly, quarterly, semiannual or annual premium payments paid for the life of the insured

• Rider to a Cash Value Life Insurance Policy: Another option that is often chosen, some individuals may choose to add a LTC rider to their life insurance policies. In these cases, the premiums can be split to pay both for life insurance and LTC insurance coverage. But beware, LTC riders differ from “accelerated death benefit” riders which do not apply to most long term care situations.

• “Either Or” Feature in a Life Insurance policy: Those who choose the “either or” feature on life insurance policies are entitled to coverage for long term care as well. However, it is important to understand that should long term care coverage be needed, benefits are paid INSTEAD of life insurance.

• Integrated into a Single Premium Deferred Annuity: With this option, part of the earnings made on an annuity is used to fund the risk of long term care. So for example, if your annuity guarantees a rate of 6%, the insurance company will guarantee 4% and use the 2% to prepare for the possibility of long term care.

• Combine LTC with Disability Income Policy: This option allows you to combine disability income policies with long term care policies. Generally speaking, any premiums paid before age 65 can only be used for disability but premiums paid after the age of 65 are used to provide long term care coverage.

General Types of Long Term Care Policies

•  Tax Qualified (TQ): With Tax qualified policies, premiums are tax-deductible on a federal level and benefits received are not counted as taxable income. Furthermore, benefit triggers are more restrictive and difficult to qualify for. For example, you must be chronically ill or be suffering from a long term physical, medical or disability-related condition. Also, you must show an inability to perform at least two activities of daily living for a minimum of 90 days and must require substantial supervision due to severe cognitive impairment.

• Non-Tax Qualified (NTQ): With Non-Tax Qualified policies, premiums are not tax deductible and benefits are generally not counted as taxable income (The treasury department has not clarified the status of benefits and taxation thus far and this may be open to further interpretation). Furthermore, benefit triggers are less restrictive and benefits are much easier to qualify for. With NTQ policies, your doctor can state the need for long term care and the policy will pay. For example, medical necessity can be used as a trigger for benefits. Also, you must show an inability to perform at least two activities of daily living and must require continuous supervision due to cognitive impairment.

Benefits & Rating Factors

• Some of the benefits you can expect to receive with a long term care policy are:

•  Coverage for home care, assisted living, adult daycare, respite care, hospice care, nursing home care and Alzheimer’s facilities.

• If home care coverage is purchased, the policy will also pay for a visiting or live-in caregiver, companion, housekeeper, therapist or private duty nurse.

• Assistance with activities of daily living (ADL’S) such as eating, bathing, dressing, toileting, transferring and continence. Coverage for personal care such as cooking, cleaning, laundry and bill paying are generally included as well

• Offers peace of mind by assisting with out of pocket expenses whereas if coverage is not purchased, many of the expenses will be left to your children or family.

• Premiums paid on LTC policies may be eligible for tax deduction and benefits received from a LTC policy are generally excluded from income.

Some of the factors that may affect rates are:

• Age

• Daily or Monthly Benefit

• How long Benefits pay

• Elimination period

• Inflation protection

• Health rating (standard, sub standard and preferred)

Other information

• For Tax- Qualified LTC Policies, the insured must need assistance for at least two of the six activities of daily living (ADL’S) in order for the policy to pay. The six activities of daily living are eating, bathing, dressing, toileting, transferring and maintaining continence. For Non Tax Qualified LTC Policies, the benefit triggers are less restrictive.

• Please visit our insurance glossary tab for a full list of insurance terms and definitions.

• There are many discounts available to help reduce your premium. Please visit our learning insurance discounts page to find out more information on how to maximize your savings.

This page contains only a general description of coverages and is not a contract. Details of coverage or limits may vary in some states and by carrier. All coverages are subject to the terms, provisions, exclusions, and conditions in the policy itself and in any endorsements.