Long Term Care Insurance Case Study
LONG TERM CARE INSURANCE
We strongly urge you to consider long term care insurance with our increasing life span and the increasing costs of care for long term illness. There are many types of long term care insurance with a wide range of costs depending on your age when you procure the policy and the type of coverage you desire. We were fortunate to obtain a group plan long term care insurance policy offered through our employer when we were in our late forties. Parents of employees could apply as well, so my mother signed up for her policy at age 78. In order to obtain long term care insurance the applicant needs to meet the medical requirements of the insurance company. For example my stepfather, who had been successfully treated for prostate cancer within the past five years of his application, did not qualify.
Factors to be considered when selecting your coverage include: Maximum Daily Amount for Nursing Home Care Maximum Daily Amount for Alternative Care Facility Care Maximum Daily Amount for Home Health Care/Adult Day Care Maximum Daily Amount for Informal Care Calendar Year Maximum For Informal Care Lifetime Maximum Benefit
Over the life of the policy, the insurance company may have cost of living premium increases …show more content…
and/or offer upgrades that may increase the lifetime maximum benefit (if there is one) or offer additional coverage options for an additional monthly cost. Once the policy holder is “certified” as needing assistance in a specific number of the activities of daily living, such as toileting, bathing, dressing, eating, transferring to/from bed, incontinence, or memory impairment, a waiting period, for example 90 days, begins. After the waiting period is completed, the policy holder’s premium is usually waived and reimbursement up to the maximum daily amount begins. The monthly reimbursements continue until the lifetime maximum, if there is one stipulated in the policy, is reached. This maximum is often about 5 years, but varies with the terms of the policy, the maximum daily amount and the type of care provided.
For individuals who would like long term care insurance but cannot afford the premiums nor meet the medical requirements, there are two types of hybrid policies: annuity-type policies and life insurance policies that contain a long term care rider.
A one-time lump sum payment is paid at the inception of the annuity-type policies and most of the life insurance-type policies. If you do not file any claims on the annuity-type policy, you may be able to cash in the policy or upon death be eligible for a return of most of the premium. In the case of a life insurance policy with a long term care rider, if you do not file a claim, you will be entitled to a death benefit that is greater than the premium on the life-insurance-type
policy.
It is important to check with the facility you are considering to determine if the benefits provided by your long term care policy can be applied to the cost of services that you will utilize in the residence now or in the future.
CONCLUSION
It is our hope that the information presented in this book will assist you in documenting the many aspects of your life and in planning for a long and healthy future.
We strongly urge you to consider long term care insurance with our increasing life span and the increasing costs of care for long term illness. There are many types of long term care insurance with a wide range of costs depending on your age when you procure the policy and the type of coverage you desire. We were fortunate to obtain a group plan long term care insurance policy offered through our employer when we were in our late forties. Parents of employees could apply as well, so my mother signed up for her policy at age 78. In order to obtain long term care insurance the applicant needs to meet the medical requirements of the insurance company. For example my stepfather, who had been successfully treated for prostate cancer within the past five years of his application, did not qualify.
Factors to be considered when selecting your coverage include: Maximum Daily Amount for Nursing Home Care Maximum Daily Amount for Alternative Care Facility Care Maximum Daily Amount for Home Health Care/Adult Day Care Maximum Daily Amount for Informal Care Calendar Year Maximum For Informal Care Lifetime Maximum Benefit
Over the life of the policy, the insurance company may have cost of living premium increases …show more content…
and/or offer upgrades that may increase the lifetime maximum benefit (if there is one) or offer additional coverage options for an additional monthly cost. Once the policy holder is “certified” as needing assistance in a specific number of the activities of daily living, such as toileting, bathing, dressing, eating, transferring to/from bed, incontinence, or memory impairment, a waiting period, for example 90 days, begins. After the waiting period is completed, the policy holder’s premium is usually waived and reimbursement up to the maximum daily amount begins. The monthly reimbursements continue until the lifetime maximum, if there is one stipulated in the policy, is reached. This maximum is often about 5 years, but varies with the terms of the policy, the maximum daily amount and the type of care provided.
For individuals who would like long term care insurance but cannot afford the premiums nor meet the medical requirements, there are two types of hybrid policies: annuity-type policies and life insurance policies that contain a long term care rider.
A one-time lump sum payment is paid at the inception of the annuity-type policies and most of the life insurance-type policies. If you do not file any claims on the annuity-type policy, you may be able to cash in the policy or upon death be eligible for a return of most of the premium. In the case of a life insurance policy with a long term care rider, if you do not file a claim, you will be entitled to a death benefit that is greater than the premium on the life-insurance-type
policy.
It is important to check with the facility you are considering to determine if the benefits provided by your long term care policy can be applied to the cost of services that you will utilize in the residence now or in the future.
CONCLUSION
It is our hope that the information presented in this book will assist you in documenting the many aspects of your life and in planning for a long and healthy future.