LONG TERM CARE INSURANCE

Facts an applicant should know about long-term care.

Why should I own a Long-Term care policy?

To help prevent your assets and retirement "nest egg" from being destroyed by the catastrophic cost of long- term care. The definition of INSURANCE is distribution of risk. At least one out of 3 of us will need long- term care during our lifetime. When we "self insure" this risk, we are playing "Russian roulette" with our finances, and retirement plans. Why not transfer this unacceptable risk to an insurance company, specializing in this protection?

You would not consider being without coverage for your auto, or home, so why leave yourself and your family exposed to this potential catastrophy?

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Comparing risk over the lifetime of 2,000 people.

2 will experience Major Fire damage to their home.
8 will experience Total Loss of Auto
500 will receive long-term care of $103,000 or more.


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What types of long-term policies are available?

In California, there are three to choose from:

1. Home Health care only plan. 2. Nursing Facility and Residential care only plan. 3. Comprehensive Long-Term care plan, (includes both 1 and 2.)

California's long-term care plans are the best of all the states, due to the passage of several pieces of legislation during the past 3 years.


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When is the best time to obtain long-term care coverage?

The ideal time is from ages 40 to 65. The younger the age, the lower the premium. At younger ages, you are less likely to have health problems.


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At what ages are these plans available?

Depending on the carrier selected, long-term care plans are available from age 20 to 99 years.


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Who should I select to advise me on long-term care insurance?

Only a limited number of agents and brokers are licensed to sell long-term care plans. If possible select an agent who has marketed this product for a number of years. Select an agent who represents several long-term care companies, because a "captive agent" who represents only one carrier, will not have the range and choice of plans that best fit your particular requirements, including cost comparison, insurability, strength of company, etc.


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How important is it to insure in a large, financially strong company?

Very Important! When the time arrives for you to call upon your company to deliver the long-term care benefits you have been depending upon, it must be financially solid, well managed, and have top A or better solvency ratings and be fully committed to providing long-term care benefits to its insured's.


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What benefits or features should I choose for solid coverage?

If it is within your budget, and if you are under the age of 75, choose lifetime benefits. At ages over 75 lifetime benefits are less important unless cost is not a limiting factor for you. Benefit waiting periods greatly affect the cost of the plan you select. A zero day elimination is the most costly. If you are able to self-insure for 30, 60, or 90 days, your premium will be lower. Generally, the daily benefit can range from $50.00 to $250.00 per day for nursing facility or residential facility care, while home health care can range from $50.00 to $200.00 per day. The younger you are the more important an inflation rider becomes. This benefit is often referred to as COLA, (cost of living adjustment). It comes in a simple 5% per year increase. The compound COLA is the most desirable. Such a rider greatly affects the amount of premium you pay and results in a 30% to 40% premium increase, depending on your age at issue.


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For what period of time must I pay premiums?

Most plans require to pay premiums for as long as you wish to continue your coverage. However, some companies feature a 10 pay plan, wherein your plan is fully paid up for the rest of your life. Some carriers offer a single premium payment and your policy is immediately paid up for life.


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Can I buy a plan that features return of premium after 6 or 10 years?

This feature is offered by some companies, however it will often increase the premium by 35 to 45%. Usually only a percentage of premium paid is refunded, less claims paid. In some policies, when return of premium is refunded, the policy ends. In other plans, the coverage continues. Most persons believe the return of premium is not a very cost effective option.


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What are some common optional benefits available woth ong-term care plans?

The most common option is the inflation benefit (COLA), increases policy benefits 5% each year, simple or compound. Survivor benefit; if one spouse dies after a specified time period (usually 6 to 10 years), the remaining person has a fully paid up policy for life.


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What are the top five causes of long-term care?

HOME CARE			NURSING HOME CARE
Circulatory Injury Cognative Cancer Arthritis	23.8% 13.7% 12.2% 9.9% 8.2% 67.8%			Circulatory Injury Cognative Cancer Arthritis	25.4% 19.0% 10.2% 9.9% 4.4% 68.9%

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The female face of long-term care.

LONGER LIFE

Outlive spouse by an average of 10 years

90% RESPONSIBLE FOR THEMSELVES

48% Widowed 36% Divorced 6% Remained single

MORE CHRONIC AILMENTS

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How does Medicare cover nursing care?

QUALIFICATIONS	COVERAGE
3 day prior hospital stay	First 20 days --- 100%
Admitted within 30 days after hospital stay	21st-100th day --- All but $95 per day co-payment
Admitted for same condition as treated in hospital	101st day on --- NONE
The care requires skilled services
The facility is Medicare approved

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How does Medicare cover home care?

NOTE: Personal Care is only covered in conjunction with skilled services.

SERVICES	COVERAGE
Part-time professional/skilled	Home visits --- 100% Unlimited
Part-time home health aides
Durable medical equipment	Medical equipment --- 80% Unlimited

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