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10 Frequently Asked Questions about Long Term Care
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May 23 2018
Corey Reick
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Long Term Care is important to consider for your future. Because it’s a topic of high priority, we’ve covered the 10 most frequently asked questions about Long Term Care.

  1. What Is Long Term Care?

    Long Term Care is assistance that may be required to ensure comfort as infirmities resulting from old age make themselves known. It may also come as the result of a prolonged illness or disability. The insurance industry views impediments to self-care as a primary means of defining which policy holders may be eligible to make a claim. If a certain number of criteria are met out of a total allotment, then a claim may be recognized. Usually, this involves meeting two of six operational self-care activities.

  2. What is the difference between skilled care and non-skilled care and why does it matter?

    Skilled care is generally provided when there is the expectation that the recipient is going to get better. Examples of skilled care can be Occupational Therapy or Physical Therapy. Skilled care can be utilized when Health Insurance is being accessed. Non-skilled care is generally provided when there is no expectation of improvement in a person’s prognosis. Attending comfort is the primary role of non-skilled care workers. It is this type of assistance that Long Term Care policies pay for. Non-skilled care is utilized when the recipient is in a chronic state; generally with no expectation of improvement. (Examples: Multiple Sclerosis, Parkinson’s Disease, Alzheimer’s)

  3. Where Should Long Term Care fit in with my overall financial plan?

    A good financial plan places equal weight on assets and asset protection. If anything can unravel a carefully thought-out financial plan, it is a chronic health condition that requires ongoing financial input. Long Term Care Planning is the best means to ensure that the rest of your portfolio remains intact in the face of ongoing or degenerative health problems.

Financial chart of income and asset portfolio protection

  1. What’s the Difference Between Disability and Long Term Care?

    Generally, disability income can protect a portion of your income if you become disabled while working. The underwriting for disability income can include financial as well as medical components and generally protects a percentage of your income for a time specific period. Disability Income can end when you are 65 so there can be finiteness to it. With Long Term Care, the underwriting is more medical in nature; focusing mainly on your ten year medical history, and what medications you are taking or have taken. Long Term Care can currently be structured so that the benefits do not end.

  2. What are some of the underwriting steps that are important to understand?

    Many people don’t realize that you have to qualify medically in order to secure Long Term Care Insurance. The phrase “Money Pays for it, Health Buys it” is certainly accurate when it comes to securing Long Term Care coverage on an individual basis. In other words, the history of your health is what determines your rates and eligibility. Long Term Care Underwriting can take roughly 6 weeks to get an outcome and can generally include any and all of the following: • Thorough review of your application by carrier • A review of your prescription drugs • Securing of your Attending Physician Statement (APS) medical records from your physician or physicians • Phone Health Interview (PHI) to discuss or clarify answers on your application or medical history and to potentially assess cognitive capability

  3. What are some of the disqualifying factors for Long Term Care Planning?

    Naturally, insurance carriers are interested in your medical history. In general they tend to look to the past ten years to determine if you are a good candidate for a policy. Known conditions can result in being turned down; for example disqualifying factors can include the presence of Parkinson’s symptoms, Multiple Sclerosis, and Alzheimer’s disease. In general it is better to set up a policy earlier in life when health is robust.

  4. When is the best time to consider Long Term Care?

    When you buy early you are in a position to potentially capitalize on your good health. As an additional benefit, savings from reduced rates can go directly to the plus side of your balance sheet and mature with your overall financial plan. It’s also important to remember that there can be a premium difference between each year in age that can range from an additional 3% to 4% depending on the solution at implementation.

  5. What’s the difference between Health Insurance and Long Term Care?

    Insurance companies view Long Term Care as a unique form of protection. Occasionally confused with disability or health insurance, Long Term Care applies to scenarios where the prognosis does not call for a return to good functional health. Health Insurance will most likely utilize skilled care while you are in recovery. When the recipient of the care is no longer improving or getting better, they may require non-skilled care which will help them with daily living activities or the issues related to impairment. Health Insurance and Long Term Care Insurance are like bookends; one helps you while you are getting better, and the other addresses chronic health matters.

  6. What are some of the main planning features on a Long Term Care Plan?

    Assuming someone can be underwritten, there are several decisions to make as to plan design:

    • Daily Benefit Amount: You can generally choose between $50 to $500 a day for your benefit.
    • Elimination Period: This is generally your deductible expressed in days. This period can range from zero days to months.
    • Benefit Period: This is the amount of time expressed in years that the carrier will pay for activated long term care claims. This period can range from several years to unlimited.
    • Inflation: To keep up with the cost of living and associated care expenses you can purchase an inflation rider so that you can maintain your buying power. The choices can include 5% compound inflation, 3% compound inflation, 5% simple inflation and derivations of each.
    • Note – Long Term Care Planning Metrics can vary by state since the products are individually filed.
  1. Why Do People Purchase Long Term Care Planning?

    People who purchase Long Term Care planning instruments tend to be realists. It’s beneficial to have an optimistic view on life, but that shouldn’t undermine a secure future. Those who acquire Long Term Care Planning coverage have had an experience where they have witnessed first hand how important it is to have a financial instrument in place that can cover the considerable costs associated with ongoing health conditions. If you have had experience with Long Term Care, then you are aware of the issues that can evolve related to expense, time, care-training and the accompanying relationship issues that can evolve.

Hopefully, these FAQs answer your most outstanding questions about Long Term Care. If you need additional information, don’t hesitate to reach out.

If you want to get your Long Term Care Planning right for you and your spouse, you must speak to Corey. His Phase I made sure I understood a fairly complex set of options – no pressure.
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