Long Term Care Planning Insurance

04.Feb.2011by Karen in Money & Law· 1 comment

Everyone at some point wonders what will happen if they can no longer take care of themselves. Where will the money come from to pay for the care? The answer to this question is found when examining Long Term Care Planning.

Richard Klotz of Keystone Financial Management stopped by our HOP2 group with very informative details on this topic.

The best time to buy Long Term Care insurance is the day before you need it. Since no one knows when that is, most purchase it at age 57 (on average). It is less expensive when you are younger.

Financial planning may be needed whether you are at home (for adult day care) or at a nursing home (for assisted living or hospice).

You receive the insurance money when a doctor determines you can’t do two of the following Activities of Daily Living (referred to by insiders as ADL):

  • Eating
  • Dressing
  • Bathing
  • Toiletry
  • Continence
  • Transferring

Choosing a policy requires careful shopping because coverage and costs vary from company to company and will depend on the benefit levels you choose. So do your homework.

The ballpark figures for long term care are:

  • Nursing home — $75,000/year (30 year inflation is $250,000)
  • In-Home — $57,000/year

Returning home, I immediately began to do some online homework. Five websites offer 5 additional considerations. Highlights and links to the full articles follow below.

Learn the Lingo and Make a Plan

from the article About Long Term Care

When a person requires someone else to help him with his physical or emotional needs over an extended period of time, this is long-term care.

Estimates by experts are that at least 60% of all individuals will need extended help in one or more of the areas above during their lifetime. The need for long-term care may only last for a few weeks or months or it may go on for years. It all depends on the underlying reasons for needing care..

Skilled care is the provision of services and supplies that can be given only by or under the supervision of skilled or licensed medical personnel.

Custodial care is the provision of services and supplies that can be given safely and reasonably by individuals who are neither skilled nor licensed medical personnel.

Questions with Answers

from a page titled Guide to Long-Term Care (LTC) Insurance and includes questions like “What should I look for in a policy?” These pages are on the Pueblo CO web site.

What are the types of long-term care policies?

Several types of policies are available. Most are known as “indemnity” or “expense incurred” policies.

An indemnity or “per diem” policy pays up to a fixed benefit amount regardless of what you spend. With an expense-incurred policy, you choose the benefit amount when you buy the policy and you are reimbursed for actual expenses for services received up to a fixed dollar amount per day, week, or month.

Today, many companies also offer “integrated policies” or policies with “pooled benefits.” This type of policy provides a total dollar amount that may be used for different types of long-term care services. There is usually a daily, weekly, or monthly dollar limit for your covered long-term care expenses.

There are no policies that guarantee to cover all expenses fully.

Choose Carefully

from the article 4 Biggest Long-Term-Care Dangers to Avoid

Recent congressional hearings underscored a host of problems consumers can face with these policies. The coverage may be worthwhile, particularly if stroke or dementia runs in your family — but you should know the risks.

  1. You could overpay.
  2. Your premiums could soar.
  3. Your claim could be denied.
  4. Your insurer could go belly-up.

Consider the other side

from the article You Don’t Need It As Badly As The Insurance Companies Say You Do

Most people buy long term care for a combination of reasons:

  • They don’t want to burden their children.
  • They want to stay in their own home in case they get sick.
  • They want to make sure they have the care should they need it.

I think it’s safe to conclude that you have a 50% to 80% of needing long term care for less than a year – if you need it at all.

  1. Find a strong insurer.
  2. Don’t buy too soon.
  3. Buy a flexible policy.
  4. Cover future costs.
  5. A four-year benefit should be enough.

Final Thoughts

In addition to the 5 preceding tips, the Lehigh Valley Woman’s Journal February/March 2010 edition on page 17 has an excellent article title Long-Term Care—An Impending Crisis for the Elderly.

The bottom line is that long term care is a family issue. You must decide and do what is right for you. If you are interested in Long Term Care Insurance, there are many insurance agents and brokers that can assist you in finding a policy to meet your needs. Remember, you can find Richard’s contact information here if you are interested in talking with him.


{ 1 comment… read it below or add one }

boony 09.Feb.2011 at 3:12 am

I found this article very up-to-date and informative as it provides excellent tips to obtain the best possible long term care insurance rates and quotes. With this handy information, you are able to make your decisions more wisely and obtain the best long-term care insurance plan for yourself. It highlights the importance of having long term care insurance especially for the people above 65 years of age in helping them to plan for their long-term care needs.


Leave a Comment

Previous post:

Next post: