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Long-term care insurance for seniors
Long-Term Care Insurance

Americans are living longer and chances are you’ll live well into your 80’s, your 90’s and possibly even longer.

When you live a long life, the likelihood you’ll need long-term health care is greatly increased.  Studies show that almost 50% of all individuals turning 65 will require between 1 and 5 years of long-term care (about 20% will need services for a longer period and about 30% will need no services).  Younger people also need care as a result of accidents or illnesses.

Long-term health care is generally not covered by medical insurance, by Medicare Supplement plans or group health insurance.  For seniors on Medicare, the long-term care benefits are quite limited. Medicaid pays for nursing home coverage for those who qualify.

That’s why over 10 million Americans have purchased long-term care insurance.  Long-term care insurance typically covers a broad range of services including nursing home care, assisted living facilities and adult day care.  Like any insurance product, long-term care insurance allows the insured to pay an affordable premium to protect an unaffordable catastrophic event.

We are licensed long-term care agents and work closely with Barbara Stahlecker, CSA, LTCP, CLTC, one of the country’s leading long-term care insurance professionals, to tailor coverage to your specific needs and budget.  Please call us at 877-734-3884  for quotes and to obtain more information. By calling this number, I understand I will be directed to a licensed insurance sales agent or broker.

Alternative to Long-Term Care Insurance

Long-term care insurance can be very expensive and individuals who need life insurance and either chronic or critical care insurance often cannot afford to buy more than one of these coverages.  AGLA (AIG) has an attractive solution that might suit your needs.  You can add free riders for chronic illness (inability to perform 2 or more activities of daily living or cognitive impairment), critical illness (major heart attack; coronary artery bypass; stroke; invasive cancer; blood cancers like leukemia, lymphoma and multiple myeloma; major organ transplant; end-stage renal failure; paralysis; coma; and severe burns to a term or universal life insurance policy at no additional cost and purchase additional riders like the defined accelerated benefits rider and disability income rider at attractive rates.  Click here for additional information or call us at 877-734-3884 for additional information. In order to qualify for payment under these riders, claim must be made to and approved by the carrier and eligibility periods apply.  Please note that these are not separate insurance policies but can be an affordable way to provide income in the event that one of the covered events occurs.

What Is Long-Term Care (LTC)?

Long-term care includes a wide variety of medical and support services for people with a degenerative condition (e.g. Parkinson’s or those conditions that occur after a stroke), a prolonged illness (e.g. cancer) or a cognitive disorder ( e.g. Alzheimer’s).

If these make you think of conditions that affect older individuals, you’re right.  Most people need long-term care in their later years (typically their 80’s).  But younger people need long-term care as a result of accidents (falling off roofs and motorcycle accidents especially for men) or illnesses like multiple sclerosis that tend to inflict younger people.

Long-term care is not necessarily medical care but rather “custodial care.”  Custodial care involves providing individual assistance with activities of daily living or the supervision of someone who is cognitively impaired.

To better understand long-term care, think of the activities that you performed when you woke up this morning.  You probably stepped out of your bed … walked to the bathroom … used the toilet …took a shower … got dressed … ate breakfast.

When you’re healthy it’s easy to take for  granted these Activities of Daily Living (ADL’s).  However, when you or a loved one is stricken with a degenerative condition such as a stroke or Alzheimer’s, performing these ADL’s becomes impossible without the assistance of another person. As we age, performing these simple functions becomes difficult or often impossible.

This type of care is what long-term care means.  It’s the same type of care that a parent must provide for a new baby.  This type of care is chronic (full-time) and thus becomes very expensive.  Long-term care can be provided in many settings including nursing homes, your own home, assisted living facilities and adult day care.

Home Care Coverage

Say the words “long-term care insurance” and chances are you think nursing home.  Today that couldn’t be farther from reality.  Today, long-term care insurance really means home care coverage.  Here are some current facts*:

There are some 7.6 million individuals currently receiving care at home: 43% of all individual long-term care insurance benefits go for home care.

Another 1.0 million Americans live in assisted living communities: 32.9% of all individual long-term care insurance benefits go for assisted living care and costs.

Some 1.8 million Americans live in nursing homes. Many are there because Medicaid pays for care in nursing homes.  Only 24.1% of long-term care insurance benefits are used to pay for nursing home care.

*Source:  2008 LTCI Sourcebook, American Association for Long-Term Care Insurance

What Do Long-Term Care Services Cost?

According to the 2010 Genworth Cost of Care Survey, the national median monthly rate for an assisted living facility is $3185 and the national median daily rate for a semi-private room in a nursing home that provides skilled nursing care 24 hours a day is $185.  Obviously, long-term care services are very expensive.  Quality nursing homes are always filled to capacity and they are consequently able to command a hefty fee for services.

Home care is also expensive.  Bringing a home health aide into your home every other day for a 4 hour visit can easily cost $1800 per month.  When the home care approaches 8 hour visits every day, the costs rise to $7200 per month.  At this point, the care recipient begins to receive facility-based care simply for economic reasons.

Are All Long-Term Care Insurance Policies Similar?

No.  There are some important and significant differences.  Each insurer charges different rates …. Each offers different discounts … and each insurer has different health underwriting criteria.

But there are other differences.  Some carriers offer reimbursement policies that pay for qualifying expenses (only up to the cost of the service).  Others will provide a fixed cost benefit that could be greater than the costs of actual services.  The latter type of policy typically costs more.

Group Long-Term Care Insurance

There are tax advantages to purchasing long-term care insurance on a group basis and the rules for qualifying are much more liberal than they are for other types of group benefits.

The Most Important Things to Know

If you are thinking about long-term care insurance, here are the most important things to know:

  1. You must health-qualify for long-term health care insurance.  Not everyone can.  Because health changes, especially as you grow older, it’s smart to look into this well before you reach retirement age (your 50’s are generally the best time to start).
  1. Long-term care insurance can be far more affordable than most people think.  Cost is an issue, so you need to know there are many ways to make this protection affordable.
  1. Rates (premiums) can vary significantly from one insurer to another.  Each insurer has pricing “sweet spots” based on your age when applying.  Available discounts and options can vary too.  It’s a reason to work with someone like us who has access to policies from multiple insurers.
  1. Health qualifications can also vary from one insurer to another.   If you’re in great health, don’t use tobacco products, take no medications – then every insurer will accept you.  Each insurer sets their own health qualifications and they change from time to time.  Be prepared to share information with us.  You want us to match you with the company offering the best protection for the best price.
  1. You’re only going to buy long-term care insurance once.  Deciding to buy long-term care insurance is a financial and emotional decision.  But, it’s different than buying car or home insurance, which people switch from time to time.  It’s almost never economically advantageous to switch (primarily because costs are based on your age at application). Many people sell long-term care insurance. Make sure you work with someone like us who really knows this business. It will save you money and yield benefits for many years to come.

Disclaimer: This is not a complete listing of plans available in your service area. For a complete listing, please contact 1-800-MEDICARE or consult www.medicare.gov (TTY users should call 1-877-486-2048).Hours of operation are 24 hours a day, 7 days a week.


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