1. What is Long Term Care?
2. What is Long Term Care insurance?
3. Who needs Long Term Care?
4. What are the odds of needing Long
Term Care?
5. How much does Long Term Care Cost?
6. Isn't Long Term Care covered by health
insurance?
7. Doesn't disability insurance help
cover Long Term Care costs?
8. What about self-insurance?
9. What do Medicare and Medicaid cover?
10. How does Long Term Care insurance
work?
11. Where can Long Term Care services
take place?
12. Is there an advantage to buying
now?
13. What does Long Term Care insurance
cost?
14. What services are covered?
15. "Maximum Daily Benefit"
- What does that mean?
16. What about home care?
17. Is there a waiting period before
claims are paid?
18. How do Long Term Care policies keep
up with rising health care costs?
19. Is Long Term Care insurance right
for you?
20. What's the next step?
__________________________________________________________________
1. WHAT IS LONG TERM CARE?
Long term care covers a wide range of services but generally falls
into two categories: skilled care is provided when recoering from
a medical treatment and personal care helps maintain the activities
and functions of daily life. Long term care is usually not medical
care and generally does not require a doctor or nurse. It is providing
individuals with assistance in daily living such as bathing and
dressing. Long term care can also include speech or occupational
therapy, outfitting a bathroom with grab bars or even light housekeeping
or cooking.
2. WHAT IS LONG TERM CARE
INSURANCE?
Just like your automobile, homeowners or health insurance, long
term care insurance is another way to help guard against risk.
It allows you to help protect your assets and maintain control
by emphasizing care in the community, home and support of caregivers.
For many, it is an economical way to pay for long term care.
3. WHO NEEDS LONG TERM CARE?
Your may think that you are too young and that long term care
is problem for the "older generation." But people of
all ages need long term care. You can suddenly need long term
care if you have a serious accident, develop an illness or get
a disabling disease.
4. WHAT ARE THE ODDS OF
NEEDING LONG TERM CARE?
The good news is we are living longer than ever before. In the
early 1900s, the average life expectancy was 47; today life expectanvies
are 74 for men and 80 for women.1
But, the longer you live, the greater your chances
are of needing long term care. Over 40% of people who are age
65 today, will need long term care at some point in their lives
and many will need home care or other related services as well.2
5. HOW MUCH DOES LONG TERM
CARE COST?
The cost for services can vary greatly, depending on what type
of care yo need and where you recieve it. But one thing's for
sure - long term care services are expensive. A recent survey
shows that about half of all Americans, 45 years and older, know
of someone who used up all their savings to pay for long term
care and then had to depend on Medicaid.3
The average annual cost of nursing home is over
$61,000, or over $168 per day.4
In many parts of the country, the costs are much greater.
Home care, although generally less expensive than
nursing home care, can still be very costly - especially if round-the-clock
care is required.
When a member of the family provides informal care
at home, the costs are harder to determine. In many cases, the
caregiver may have to give up work either temporarily or permanently.
It is also impossible to put a price tag on the emotional stress
the caregiver may expierence. Many caregivers suffer emotional
and physical stress in trying to deal with situations that they
have never been trained or prepared for.5
6. ISN'T LONG TERM CARE
COVERED BY HEALTH INSURANCE?
Many people mistakenly believe that some other program already
covers them. According to a recent survey, 62% of adults ages
45 and older, are unaware of the policies of either Medicare,
Medicaid or disability insurance with respect to long term care.6
And an alarming 46% of those who have health insurance believe
that this insurance would cover most of their long term care costs.7
Since long term care is not considered medical care, most health
plans won't pay for it.
7. DOESN'T DISABLITY INSURANCE
HELP COVER LONG TERM CARE COSTS?
Disability insurance is designed to help replace part of lost
income while you are actively employed and usually, the coverage
ends at age 65 or upon retirement. Disability insurance will not
cover the duration and high cost of long term care. By the timne
you may realize you are not covered, it may be too late.
8. WHAT ABOUT SELF-INSURANCE?
What would you think about someone who told you they had no homeowners,
health, or automobile insurance? Did you know that the probability
of a house fire is about 1 in 1,200? Having a major auto accident
is 1 in 240. The chances of needing long term care are far greater!8
Of course, you can always rely on your own resources to pay for
your long term care needs. Unfortunately, many underestimate the
costs of long term care and end up using up their retirement savings
and in many cases selling assets such as their home. Is long term
care a risk that you want to keep?
9. WHAT DO MEDICARE AND
MEDICAID COVER?
Generally, Medicare covers only skilled care after you have been
in the hospital for at least three days. It usually does not cover
personal or home care services. It was never designed to pay for
extended long term care and you should not count on it to meet
this need.
Medicaid is designed to pay for nursing home care
for the very poor. To qualify, you must meet your state's poverty
gidelines. In many cases, you must use up (or "spend down")
your assets and savings to just $2,000. If you have assets to
protect, Medicaid is not an option for you.
10. HOW DOES LONG TERM
CARE INSURANCE WORK?
Long term care insurance is designed to pay for those who need
help with activities of caring for yourself such as getting dressed,
eating or moving from a bed to a chair. Someone with a cogntive
impairment (such as Alzheimer's disease or senile dementia) may
need constant supervision and reminders to do simple daily tasks.
11. WHERE CAN LONG TERM
CARE SERVICES TAKE PLACE?
When you think of long term care, the first thing you may think
of is a nursing home. But if you're like most people, you probably
want to avoid a nursing home, unless there is no alternative.
Long term care can be performed in a variety of settings including
institutions, such as a nursing home or assisted living center*,
or in your home or a community-based adult day care center. A
recent survey reveals hat if they were unable to care for themselves,
and did not need round-the-clock, 75% of Americans would prefer
to receive care at home.9
*In California an "assisted
living facility" is authorized to transact business as a
"residential care facility".
12. IS THERE AN
ADVANTAGE TO BUYING NOW?
When you purchase coverage at a younger age, you'll pay a lower
premium (and likely over time pay ar less in total premiums).10
Since you must be reasonably healthy to obtain long term care
insurance, you'll also avoid the risk of not qualifying for health
reasons. Finally, don't forget about peace of mind. Owning a long
term care policy will allow you to feel confident about the future
by helping protect your financial assets from the high costs of
long term care.
13. WHAT DOES LONG
TERM CARE INSURANCE COST?
Many people do not know the actual cost of long term care insurance
and mistankenly believe it is unaffordable. Although actual premiums
may vary widely, it may take just one year or less of claims to
recoup a lifetime a premiums.11
14. WHAT SERVICES
ARE COVERED?
Over 20 years ago the first long term care insurance policies
used to only cover individuals that were in a nursing home. But
today, there are many long term care alternatives and insurance
policies emphasize care in the home and support of caregivers.
Some policies cover:
| Institutional Care |
Home Care |
| Nursing home |
Adult Day Care |
| Adult Foster Home |
Home Health Care |
| Assisted Living Services Facility |
Homemaker Personal Care |
| Residential Health Care Facility |
|
| Bed Reservation |
|
| Respite Care |
|
| Hospice Cover |
|
15. "MAXIMUM DAILY
BENEFIT" - WHAT DOES THAT MEAN?
The Maximum Daily Benefit is the greatest amount your policy will
pay toward your institutional long term care needs for one day.
A few policies offer various choices usually starting at $50.00
per-day to a maximum such as $500.00 per-day. The amount of the
benefit you choose will depend on many factors including how much
you think it might cost you per day to say in a nursing home in
the area in which you believe you will be needing long term care.
Premium will vary with choice of benefits selected.
16. WHAT ABOUT
HOME CARE?
Staying at home is an important part of overall long term care
planning. Several policies offer home care as a stated percentage
of the maximum daily benefit. It is usually 50%, 75% or 100% of
this benefit amount.
17. IS THERE A
WAITING PERIOD BEFORE CLAIMS ARE PAID?
Yes. A waiting period, also called an elimination period, is the
time you must wait before becoming eligible to make a claim against
your policy. The elimination period is the long term insurance
equivalent of a deductible or "out-of-pocket" expense
- just like your automobile or health care insurance. But unlike
other deductibles, it is based on a number of days, not a dollar
amount.
18. HOW DO LONG
TERM CARE POLICIES KEEP UP WITH RISING HEALTH CARE COSTS?
Over time, the cost of almost everything we purchase goes up.
Long term care services will be no different. There may be a long
period between the time when you purchase your coverage and you
actually use it. You can protect the value of your coverage and
keep up with the rising costs of health care services with inflation
protection. This is an important feature of any long term care
policy and critical for all buyers under the age of 70.
19. IS LONG TERM
CARE INSURANCE RIGHT FOR YOU?
If you have assets or income you want to protect from the high
costs of long term care then you should seriously consider long
term care insurance. After all, don't you want your home, life
savings or other assets to go to your spouse, children or charity
instead of a nursing home? Your should also consider long term
care insurance if the following are important to you:
• Access to multiple facilities - As a private
pay patient (those who pay with their own money or long term care
insurance) over welfare (Medicaid or Medicare) patients, you will
have the freedom to choose a facility that fits your personal
needs.
• Independence - Maintaining control is important
to us. We like to have choices and don't want to be told by the
government where we will have to receive care.
• Not relying on the people close to you -
Most people don't want to be a burden, financially or emtionally,
to their spouse, children, relatives or friends.
• Avoiding welfare - Most of us don't want
to depend on the government for help. Welfare is for the truly
needy.
• Peace of mind - It would be a tremendous
comfort to know that if something happens, you and your family
will have the financial resources to help pay for long term care
services.
20. WHAT'S THE
NEXT STEP?
Long term care can be a complex issue and for many, requires professional
huidance. It is a good idea to start by speaking with family members
or relatives about the potential costs and likelihood of needing
long term care. Then find a professional who you are comfortable
with and trust to explain the options available to you. Before
you make a final decision, make sure you have performed a through
review of the policy and it is within your financial means.
Take control fo your future - set yourself a deadline
about finding out more about long term care insurance and keep
to it. Remember, the key to a happy and successful future is planning!
Policy Exclusions
This is a general list of exclusions, however, state variations
may apply. Your Policy is designed to provide benefits to pay
for your Qualified Long Term Care Services needs. Benefits will
NOT be payable if any of the following situations apply:
Government Plans
Charges are for a service or supply you recieve that is:
1. Furnished by or for the United States government
or any other government, unless payment of the charge is required
by law; or
2. Provided by any law or government plan under
which the patient is covered. This does not apply to a state plan
under Medicaid or to any law or plan under Medicaid or to any
law or plan when, by law, its benefits are excess to those of
any private insurance program or other non-governmental program.
War, Felony, Riot or Insurrection
Charges for conditions due to war or an act of war while you are
insured or due to your participation in an act of felony, riot
or insurrection. "War" means declared or undeclared
war and includes resistance to armed aggression. "Riot"
means a wild, violent, public disturbance of the peace.
Services and Supplies Outside the United
States
Charges for services or supplies outside the United States and
its Possessions.
Services or Supplies Normally Furnished
Without Charged
Services or supplies for which no charge would be made in the
absence of insurance.
Treatment or Chronic Alcoholism or Drug
or Chemical Dependency
Charges in connection with treatment of chronic alcoholism or
drug or chemical dependency.
1. U.S. Life Expectancy Rising with
Health Care Costs, The Washington Post-online, David Brown. October
5, 2003.
2. Agency for Healthcare Research
and Quality: Long-Term-Care-AHRQ publication no. 02-MO28, March
2002. P.1
3. Long-Term Care Insurance Survey.
RoperASW. September 2002. Executive Summary P.1.
4. Prudential Financial Long Term
Care Cost Survey, January 2004.
5. AARP Magazine: AARP Resources:
Care Giving. February 25, 2003. P.1
6. Long-Term Care Insurance Survey.
RoperASW. September 2002. Executive Summary P.1.
7. Long-Term Care Insurance Survey.
RoperASW. September 2002. Executive Summary P.1.
8. "About Long Term Care Insurance,"
Thomas Day. 2002 P.3
9. Long-Term Care Insurance Survey.
RoperASW. September 2002. Executive Summary P.1.
10. "Getting Ready" Melanie
Waddell, Investment Advisor, September 2003. P.101
11. "LTC Insurance: How Much
Do You Know?" Tracy Longo, Financial Advisor, February 2002.
P.2
(Availability of features and options varies by
state. Premium will vary with choice of benefits selected. For
costs and complete details of coverage, call Approved Management
Concepts.)
