Long Term Care Insurance Basics

Do you know what the future holds for you and your family?  Of course not.  No one can know for sure.  What we can only know for sure is that we will either die quickly or we will die slowly.  This Long Term Care Insurance basics article is for those individuals who realize that they probably will not die quickly and, in fact, may linger for several dependent years.

We suggest that you print this page and look our Long Term Care Insurance basics info over in due course.  We have included quizzes, stats, and policy details that, in our experience, you will find helpful when shopping for Long Term Care Insurance.  If you have any questions simply fill in the contact form below and an LTC Tree representative will contact you.

A few reasons you may need Long Term Care…

• Alzheimer’s Disease, Senile Dementia
• Parkinson’s Disease, Organic Brain Syndrome
• Arthritis, Bone Fractures, Depression
• Cancer, Diabetes
• TIA’s, Strokes
• Heart Disease

Long Term Care Insurance basics, what are your odds?

• Fact: Almost 50% of people older than 85 are afflicted with Alzheimer’s Disease.
• Fact: The life expectancy at age 65 for women is 86.6, and for men, 84.3.
• Fact: In 3 out of 4 couples (75%), at least one person will need Long Term Care at some point in their lives.

Do not “Crisis Manage” by trying to solve the problem AFTER it happens.  This would be akin to trying to buy car insurance after the accident.  Instead, have a plan before the crisis happens.    65% of Americans surveyed believe they will never need nursing home care.  Read on to find out why this may not be true.

No one likes to think about the chance of needing Long Term Care, whether it is nursing home care, assisted living care, at home care, community care, or any other type of Long Term Care.  Maybe that is why so many people in the past have not planned for Long Term Care.

Unfortunately, when the time has come and they needed it, their finances have been caught off-guard.  Families have “crisis managed” when their mom or dad has fallen and broken a hip.  Not only have they had no idea where to begin in order to obtain Long Term Care services for their parent, they have had no idea how to pay for it.

If you do not want your family to crisis manage when you or a family member needs Long Term Care, ask yourself the following questions before the need for Long Term Care arises:

• Where will you get your care?
• Who will manage and coordinate your care?
• How will you pay for your care?

Could your nest egg (savings/investments) withstand the devastating cost of Long Term Care?

Today, most people are aware that Medicare (Welfare) pays very little for Long Term Care and that Medicaid only pays once you are impoverished and have run out of money.  Most states have a Long Term Care Insurance Partnership Program that may give you a safety net if you use up your policy.
» For more information on the Long Term Care Partnership Program click here.

The fact is, if Long Term Care is required, the money to pay for it comes from the family’s savings. Unfortunately, most people’s savings cannot withstand several years of Long Term Care costs.  Perhaps that is why 70% of those in nursing homes nationwide are supported by Medicaid.

Once on Medicaid, your choices for care are limited to only those homes that have voluntarily chosen to participate in this federal Medicaid government program. These nursing homes may not be the nursing homes you would necessarily prefer for yourself or a loved one.  So, if Medicare and Medicaid won’t do the job, what is your answer?

Long Term Care Insurance basics, which plan is right for you and your family?

People who purchase Long Term Care Insurance generally do so because of one of the following reasons:

• They do not want to be a burden on their children, spouse, and or family.
• They want quality care for themselves or a family member.
• They want to maintain their independence.
• They want to preserve their life’s savings for their family.

What is an affordable Long Term Care Insurance premium?

Long Term Care Insurance is affordable if you can purchase the coverage without affecting your lifestyle or depleting your life savings.

Which of these four major risks have you insured?

• Home, fire, and burglary insurance?
• Automobile damage and liability insurance?
• Medical insurance?
• Long Term Care Insurance?

Are you willing to risk your life’s savings and nest egg to your greatest risk you will face in your retirement years?

What risk, other than the cost of Long Term Care, can you think of that could involuntarily wipe out your nest egg?

Where should the money come from to pay your Long Term Care Insurance premiums?

Long Term Care Insurance is not for everyone.  If you having savings of $100,000 or more, Long Term Care Insurance might be a good fit.  Premiums are a fraction of the amount they protect, and with smart benefit selection you can find the right balance between too much and too little coverage.  There are lots of Long Term Care Insurance riders that may push up the cost adding features you don’t need.

By now you should have concluded that the only catastrophic risk left that could involuntarily destroy or severely deplete your life savings is the cost of Long Term Care.   Therefore, would it not be fair to say that your emergency money, or rainy day money, is really your Long Term Care Insurance as of right now?

Long Term Care Insurance makes sense for your financial situation.  What is the next step?

After you have determined where the money will come from to purchase Long Term Care Insurance, you must decide from what company you will purchase it.  There are not many experts in the field, but rather many financial advisors who sell Long Term Care Insurance on the side.  Ask most of these financial advisors a question about the policy, and you will probably realize that you know more than the financial advisor. Your best help will come from a full-time career specialist in Long Term Care Insurance, such as any of the specialists on our LTC Tree team.  We know the industry inside and out.

Three Long Term Care Insurance basics you must make when purchasing Long Term Care Insurance:

The Company: If the Long Term Care Insurance Company you choose to do business with has not earned an A rating by A.M. Best or if it has very little experience in Long Term Care Insurance, you may want to think twice.  You must also feel comfortable that the company you choose will be around to pay your claim.

The Plan: Most agents offer 1-2 companies.  It is best to go with a broker like LTC Tree which works with all the companies so that they can shop the entire market and help save you the most money.  It will be up to you to determine how much coverage to buy.  Does the plan take into account inflation?  If it does not, you might be stuck with paying a larger out of pocket expense.

The Price: Price is very important and if you are dealing with the big blue-chip carriers we usually recommend the plan with the best price.

The key Long Term Care Insurance basics to purchasing the right LTC policy is to find the balance between paying too much and too little for a plan.  There are a lot of companies that sell LTC coverage, but only a handful that are quality.  It is imperative that you shop around and get quotes from three to five companies.  Choose an agent who works for all the top companies to get a true objective opinion.  When deciding on the amount of coverage, it is important to know the statistics, such as 85% of all claims on LTC are for three years or less.   Unless your family has a history of Alzheimer’s, it might not be prudent to have an unlimited benefits period.  Take your time and do your homework, and you will find the right LTC policy for you.