Thursday, April 26, 2012

Pros and Cons of Long-Term Care Insurance

In recent years long term care (LTC) insurance has gained in popularity, mainly because it is so new and takes time for people to comprehend. Created in the 1980s as a way to prepare oneself for retirement, long term care insurance policies are now held by nearly eight million group or individual plans. This shows how few people have it and how it is gaining in popularity. There are both pros and cons to having this type of insurance plan which will be discussed below. Remember that this is not for everyone, but for those it applies to will greatly benefit.
Long TC insurance can be very beneficial to those who become disabled while under coverage and require either arrangements to live in an assisted living facility, a nursing home, or in their own home. They also are very flexible, allowing you to choose when and for how long the plan lasts for and the payout rates. 
There are many pay reductions to those who are in good health, young, pay your premium in one lump sum, having your family covered under one plan, etc. In turn, this means savings in your pocket. The payments are made on a daily or monthly basis depending on the plan and type of coverage you initially purchased. This means that the larger the benefit you receive and the more the policy pay out; the greater the out of pocket costs will be for the long term care insurance policy.
The major drawback to Long TC is the expenses that you have to pay. These can vary by plan, but usually run fairly high. The reasoning is that the coverage you are receiving is expensive to maintain. You are being assisted upon 24 hours a day. This does not come by cheap. When you add up the costs; approximately $80,000 a year would be spent by you, but if you have a LTC Insurance plan then you only pay $2,000 - $3,000 a year in premiums. This does not seem like that bad of a deal anymore.

In essence, long term care insurance is a good option for many Americans, but not all. One of the main objectives of long term care insurance is it is designed to protect assets, so if there are not assets to protect then you shouldn't’t purchase long term care insurance. You must weigh out the pros and cons before jumping into this decision, but more often than not it is a wise choice to get covered. Be aware that in order to be eligible for your claim your doctor must certify that you that you are not able to perform two or more activities of daily living functions for a period of three months or more. These include, but are not limited to: bathing, eating, dressing, continence, transferring and toileting or suffer from a cognitive impairment such as Dementia.

Summary: Learn the benefits of having long term care insurance versus the cons of having this type of insurance plan. The LTC insurance plans work great for most people, but may not apply to all.

Wednesday, April 18, 2012

Long-Term Care Insurance Elimination Period Explained and the Different Types

The Elimination Period is one of the core benefits of a long-term care insurance policy, it is much like the deductible on your auto or homeowners insurance. The only difference is instead of paying money up front for the deductible you satisfy it with days you pay out of pocket for the own care you receive. Most long-term care insurance companies offer a 0, 30, 60, 90, 180, and sometimes a 365 day Elimination Period. The more common ones that people choose are 30 and 60 days. This means that once you go on your LTC claim - your doctor certifies that you will need care for more than 90 days due to suffering from a cognitive impairment or you are unable to perform 2 of the 6 activities of daily living - you will have to pay for your own care for the specified period of time you originally choose your Elimination Period to be before the insurance company will begin paying your long-term care insurance benefits.

However, sometimes this can be confusing and there can be a catch to Elimination Periods. The reason is, does this mean you have to be actually receiving care for each of the days (say 60 days) or does it just have to be 60 days total regardless if you are receiving care on the actual days or not. There is a difference. The long-term care insurance companies either have a Calendar Day Elimination Period or a Service Day Elimination Period. Here is an example:

Say you purchase a policy that has a 60 day Elimination Period and you receive home health care benefits for 3 days a week and you have a Service Day Elimination Period it would take you 20 weeks/5 months to satisfy your Elimination Period. If you were to have a Calendar Day Elimination Period your LTC insurance benefits would begin after 60 days, regardless of how many days a week you received and paid for your care. As you can see a Calendar Day Elimination Period is definitely the better deal.

Some long-term care insurance companies have the Calendar Day Elimination Period automatically included in their polices, others you have to pay an additional cost for this. It varies from company to company. To learn more and to see what LTC insurance companies offer this benefit in their policies visit and fill out the confidential form.

Thursday, April 12, 2012

Planning to Use Assets to Pay for your Long-Term Care Expenses?

Many people feel that they do not need long-term care insurance because they will pay for their care themselves. If this is the case, you should rethink this and answer this questions - What assets have you set aside to pay for your long-term care expenses? After thinking about this, is the answer your retirement savings or your children's inheritance. Or if you plan to liquidate assets to pay for your long-term care needs, please know that this may trigger penalties and tax consequences and also the loss of future earning the asset may have created.

Long-term care insurance may be a better alternative if you compare the costs of the premiums versus using assets that have been already allocated elsewhere. To talk to a professional about your long-term care choices complete this form here -

Thursday, April 5, 2012

Long-Term Care Insurance - What is Shared Care?

A shared care long-term care insurance policy can be a great way for couples to not only reduce the cost of their premiums but it can also give you more coverage, it gives you more value for to your coverage by combing two individual policies. It allows you and your spouse to split your long-term care benefits and use your spouses benefits when you have exhausted yours. Here is an example of how shared care works. Lets say you and your partner each have a 3 year benefit period and you have used up all of your 3 years of long-term care insurance benefits and you still need care. You will then be able to use your partner's long-term care benefits, some or all. Your partner will then have the remaining benefits that you don't use for him/her if they should need care.

Typically when one partner dies the surviving partner's benefits will be increased by the deceased partner's remaining benefits. For example, if you both have a 3 year long benefit period and your partner received care for 2 years and then passes away, your long-term care insurance benefit period will be 5 years. Premiums are typically reduced by the shared care benefit rider as well.

The shared care benefit costs about an additional 15% on a long-term care insurance policy, but this is typically cheaper than buying two separate policies with a longer benefit period and  there is a great chance that one of you will need long-term care services.

Shared care policies do differ from company to company. To learn more visit and complete the confidential form for some shared care comparison quotes.