Long Term Care Insurance
Long Term Care Insurance
Many people plan for retirement, but few think about what will happen to that plan if they or a loved one were to need long term care.
Long term care can range from assistance in performing basic activities of daily living to highly skilled medical care in a controlled environment. Because the risk of needing long term care increases with age, it is important to plan for your care needs now, while you are younger and healthier.
Long term care insurance helps you pay for the long term care services you may require. Without coverage, the major costs associated with these services have the potential to deplete an individual’s or family’s financial resources.
The security offered by an individual long term care insurance policy can help preserve your savings and assets, your lifestyle, and your independence should you need long term care. Access the link below to see how a tax-qualified long term care insurance policy can fit your specific needs.
Individuals and families
A long term care need can happen to anyone – whether you need care yourself, or find yourself in the position of caregiver.
Long Term Care Insurance
Many people plan for retirement, but few think about what the consequences would be to their overall nest egg if they or a loved one should need long term care services.
Long term care can range from assistance in performing basic activities of daily living to highly skilled medical care in a controlled environment. As we grow older the odds of needing long term care increase greatly. It is important to plan for your care now while you are younger, healthier and able to obtain insurance protection that can preserve what you have worked to accumulate.
The peace of mind provided by long term care coverage can ultimately preserve your savings, assets, your lifestyle and your independence should you need long term care services.
Ultimately, is your spouse or children going to provide care for you? What type of impact will they have on their families and careers if they have to provide the care?
“Average annual nursing home care (private room) is $75,190. Average daily cost for eight hours of home care is $206.” Source: MetLife Mature Market Institute, Market Survey of Nursing Home and Home Care Costs, September 2006.
More than 15 million adults in the United States care for ailing relatives, saving the health care system billions of dollars but “at considerable cost to themselves.” Source: University of Pittsburgh, CNN, February 2007.
Questions About Long Term Care
Why buy Long Term Care?
Medicare does not cover skilled care for 100 days. Skilled care is classified as more than 3 days, treating the same illness, and is accompanied by a plan of care.
How much does Long Term Care cost?
Long Term Care can be expensive. The cost of your Long Term Care insurance is relative to which plan and different options are selected.
Who pays for Long Term Care?
There are a variety of ways to pay for Long Term Care insurance:
Personal resources of an individual or families
Long Term Care insurance
Some assistance from Medicaid
Who may need Long Term Care?
The need for long term care is hard to predict. Those individuals recovering or living with disease or illness may need it for a few months, years or even for the rest of their life. The type of care needed depends mainly on the physical condition of the individual.
How do Long Term Care Insurance policies work?
There are many different plans accompanied by many different options that provide different types of coverage. Long Term Care insurance policies are not standardized.
How are Benefits are paid?
Expense-incurred method and indemnity method are two methods in which benefits are paid. Using the expense-incurred method the insurance company must decipher whether you are eligible for benefits and if the claim is eligible for services. When the indemnity method is used, the benefit is a set dollar amount. The insurance company will only decide if you are eligible for benefits.
Long Term Care Insurance Carrier-required Premium Deposit Grid
Carrier Cash with App Procedures Saving Age Procedures
Carrier |
Cash with App Procedures |
Saving Age Procedures |
Allianz |
Allianz requires at least 2 months of premium to process the application and bind coverage. Can only submit 1/12 of annual premium in CA for applicants of all ages and in NH for applicants over 65. |
Allianz will backdate the policy up to 60 days prior to the application date to save age |
Genworth |
Genworth requires a full modal premium be submitted with the application (For monthly, submit 3 months). Can only submit 1/12 of annual premium in CA for applicants of all ages and in NH for applicants over age 65. |
Genworth will save age if the application is signed within 30 days of the applicant’s birthday. |
John Hancock |
John Hancock requires a minimum of one month of premium be submitted with the application. Exception: 1/12 of the premium must be submitted with all CA applications |
John Hancock will backdate the policy 32 days from the application signature date to save age. (The 32 days includes the applicant’s birthday and application signature date.) |
Lincoln Life MoneyGuard |
Lincoln Life does not require that money be submitted with application. |
For single premium MoneyGuard cases, Lincoln Life will not backdate prior to the application date. However, if the birthday occurs after the application date and the age changes during underwriting, they will date the policy to save age – maximum is 3 months. |
Mass Mutual Financial Group |
Mass Mutual requires that at least one month's worth of premium be submitted with the application. |
Mass Mutual will allow the client to save age by back-dating up to three months. |
MedAmerica |
Requires full modal premium with application. If monthly, then 2 months required. |
MedAmerica does not save age. The issue date is based on the application sign date. If the application is signed on the birthday, the new age applies. |
MetLife |
No premium required with application. For monthly bank draft, submit 2 months premiums. |
30 days to save age |
Prudential |
Prudential requires 1 month of premium be submitted with the application. However, a full modal payment (2 months if EFT) must be submitted with the application in order to get Limited Insurance Agreement. Can only submit 1/12 of annual premium in CA for all applicants and in NH for applicants age 65 and over. |
Prudential will backdate the policy 30 days from the application signature date to save age. |
1. Average annual cost for nursing home care (semi-private) is $57,764.90. Average daily cost for eight hours of home care is $144.96. Source: MetLife Mature Market Institute, August, 2003.
2. Restrictions apply. Premium discounts not available in all states.
For cost and further details of coverage including exclusions, reductions or limitations and the terms under which the long-term care Insurance policy may be continued in force, contact your licensed Virginia Barristers Alliance representative. This information is being provided with the understanding that it is not intended to be interpreted as specific legal or tax advice. Neither The Virginia Bar Association nor the Virginia Barristers Alliance or any of its employees or representatives are authorized to give legal or tax advice. Individuals are advised to seek the guidance of their own personal legal or tax counsel.
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