A Resource Guide to Successful Long Term Planning

Note: Some of the questions and answers here relate to group LTC plans offered through your workplace.

1) What is long-term care? What are my odds of needing it?

2) Why would I need LTCI?

3) Doesn't my existing health insurance plan cover long-term care?

4) Are premium rates for LTCI fixed once I'm enrolled or do they increase each year?

5) If I leave the company, does my LTCI coverage continue and, if so� at what rate?

6) How do I apply for LTCI? How do eligible family members apply?

7) Are there any advantages to buying this insurance plan vs. buying a long-term care
policy on my own?

8) What is the �right� age to buy LTCI?

9) The LTCI Policy offers several choices of coverage amounts. How does a person decide which is the �right� amount?

10) What does it mean when we talk about your �total amount of benefit dollars?�

11) Is buying LTCI different from (or better than) using my own savings? Why or why not?

12) Some people say� "I'm counting on my Spouse/Domestic Partner and children to take care of me." If that�s true� why would I need (or want) LTCI?

13) How do I find out the premium for another eligible family member?

 

Answers

1) What is long-term care? What are my odds of needing it?

Long-Term Care consists of assistance for everyday tasks that you may no longer be able to perform by yourself. For example, there may come a time when you need help getting dressed, transferring or bathing. Long-term care also includes help in case you have a severe cognitive impairment, such as Alzheimer's disease. You can receive Long-Term Care in a variety of settings, including your own home, a nursing home or an assisted living facility. 

The odds are that you will need long-term care at some point in your life and you may need it sooner than you think. 1 in 2 people over the age 65 will need long-term care, and nearly 40% of people currently needing long-term care services are working adults age 16-64. 

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2) Why would I need LTCI?

Long-Term Care, without coverage, will be expensive and can deplete your hard-earned savings. The national average cost for nursing home/facility care is $70,080 annually and home care is over $23,000 per year.

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3) Doesn't my existing health insurance or other insurance cover long-term care?

You may think that you are covered by your existing health coverage plan, when in most cases you are not. 

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4) Are premium rates for LTCI fixed once I'm enrolled or do they increase each year?

Policy premiums are fixed based on a person's age at purchase. It is important to select a carrier that has quality product features and financial strength, however, all insurers reserve the right to increase the premium. If this were to happen, it would increase on a class basis, for the entire product series filed in a state. Premium rates cannot be arbitrarily increased due to an individual's claim level or age.

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5) If I leave the company, does my LTCI coverage continue and, if so� at what rate?

Most long-term care policies are fully portable. This means that you can take the policy with you. You can keep paying the premiums directly to your existing carrier, while retaining the existing coverage and any premium discounts that you had when you enrolled. The portable options will be identical to the ones offered to the employees. 

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6) How do I apply for Long-Term Care Insurance? How do eligible family members apply for Long-Term Care Insurance?

Contact your long-term care planning specialist to arrange a date and time where you can review available plan designs, premium costs and the application process. Your specialist will walk you through the enrollment process and answer any questions you or family members may have.

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7) Are there any advantages to buying this policy vs. buying a long-term care policy on my own?

Yes. When you enroll during your initial enrollment period, you may be eligible for a group discount and streamlined underwriting. This can make the process of getting insurance coverage more efficient and affordable.

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8) What is the "right" age to buy LTCI?

Because your premiums are based on your age and health, the younger you are, the lower are your premiums. Premiums typically increase 8-10% each year a person waits to buy coverage. The older you are, the greater of a risk you become in terms of frailty in the view of the insurance company.

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9. Long-Term Care Insurance policies offer many options of coverage and plan features. How do I decide which plan is right for me?

There are many important factors to consider when establishing a suitable amount of coverage for you and your family. A good point of reference to start with is be aware of the costs for long-term care in your area.
You will also want to consider the amount of your personal savings, family budget and where you are going to be the most comfortable receiving care. A personal consultation with a Long-Term Care Specialist can help you examine these issues and determine the level of coverage that is right for you.

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10. What does your Long-Term Care policy mean when it says �total amount of benefit dollars?�

When you purchase long-term care insurance, you are buying a �bucket of money� or pool of dollars from which you can pay your long-term care expenses. This means that you will have a specific dollar amount available for reimbursement of your long-term care expenses. The bucket of money or pool of dollars for your care is based on your benefit period multiplied by your daily or monthly benefit amount. Your Long-Term Care Specialist will help you determine the benefit that is right for you.

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11. What is the difference between buying Long-Term Care Insurance and paying for my Long-Term Care out of my own pocket?

The difference is that, with long-term care insurance, you are transferring some or all of the risk of paying for long-term care to an insurance company. How you prepare for your long-term care is completely up to you. When trying to budget for your long-term care needs, you will want to research the average amount needed to invest to have enough reserves to pay for your long-term care. If you decide to use your personal savings for your long-term care expenses, you should consider starting to save as soon as possible. The cost of long-term care for a one-year stay in a nursing facility is projected to exceed $160,000 per year by 2020.

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12. Some say, "my spouse or family will provide to care for me." If that is a possibility, why would I need (or want) Long-Term Care Insurance? 

The most tender and devoted family members might not be on hand or have the skills necessary to offer the kind of care you need when you need it. What if your spouse/family member was in poor health as well? What if you become single or family is scattered around the state or country? And, in many cases, adult children have demanding jobs that keep them occupied and/or would make it nearly impossible to devote care for their parents. Long-term care insurance is one way to ensure you have the resources to pay for long-term care by qualified and licensed caregivers.

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13) How do I find out the premium for an eligible family member?

You can go to Request More Information to get a premium rate for you or an eligible family member. A Long-Term Care Insurance Specialist will contact you to provide the specific information you need to make an informed decision.

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This summary was intended to be a basic review of commonly asked questions and answers. For questions or clarifications about specific policy features and definitions, you may request a specimen policy to review. The insurance policy will define the terms and conditions for benefits that apply to you.

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