Long Term Care Insurance

Do you have questions about Long Term Care Insurance? Take a look around QuoteCorral.com's Research Center to learn more about LTC Insurance and how it can protect you and your family. This page contains our Frequently Asked Questions (FAQ), we also have a glossary available.

Frequently Asked Questions

 

What is Long Term Care?

Long term care focuses on managing a patient's difficulties with activities of daily living caused by chronic illness or injury. The duration of long term care can be weeks or months when assisting a patient recovering from stroke, injury, chemotherapy or major surgery. Long term care may also go on for years with patients suffering from chronic health problems such as arthritis or Alzheimer's. Half of all nursing home stays are 6 months or less.

Who Needs Long Term Care?

Many people believe long term care is just for the elderly, but the truth is that 40% of people currently utilizing long term care are between 18 and 64. Nearly 30% of stroke victims are under 65. The average age of onset of ParkinsonŐs disease is 60, and debilitating accidental injuries can happen to healthy people of any age. Half of the population will require long term care at some point.

Who Provides Long Term Care?

In ideal circumstances, the patient can be cared for at home by family members, but this is often impossible due to family members' employment, distance or the severity of the patient's impairment. Options for non-family assistance include, Home healthcare professionals, adult day-care, assisted living centers, and nursing homes.

What Does Long Term Care Cost?

The national average in 2006 for home care providers was $25.00/hour, with certified care providers charging an average of $36.00/hour. Assisted living center private rooms averaged $2,691/month or $32,200/year.

Who Pays for Long Term Care?

What are the Benefits and Risks of...

Self Insuring: The patient has the benefit of total control over all aspects of care. The risk is the depletion of financial assets and the hardships this could cause the patient and his or her dependents.

Medicare: The patient receives health care until he or she is able to leave the hospital. This is an entitlement program with elegibility requirements. It is not intended for long term care. Medicare supplement insurance may help with deductibles and co-pays, but will not pay for non-medicare approved expenses.

Medicaid: Certain patients are provided with services deemed medically necessary. Medicaid is a government run welfare program for the very poor. Most people will have to spend down most of their assets before becoming eligible.

Long Term Care Insurance: Depending on the type of policy purchased, coverage may include: home care (often from the first day needed), private duty nurse, live-in caregiver, therapists, assisted living, hospice care, adult day care, etc. Premiums paid for LTC insurance may be tax deductible, consult your accountant or tax professional.

Is There More Than One Type of LTC Insurance Policy?

There are currently two types of Long Term Care Insurance policies available in the United States. These are the Non-Tax Qualified (NTQ) and the Tax Qualified Long Term Care insurance policies. It is advisable to consult an accountant or tax professional for help deciding which type is best for you.

What is Non-Tax Qualified Long Term Care Insurance?

Also known as Traditional Long Term Care Insurance, this policy has been available for over 30 years. The patient's own doctor and (in some cases) a representative of the insurance company determine a "medical necessity" trigger. The insurance company pays for thsi care. The benefits are taxable.

What is Tax Qualified LTC Insurance?

This type of policy does not have a "medical necessity" trigger. The benefits are non-taxable. However, these policies usually require that the expected duration of patient care will be at least 90 days, that the doctor provided a "plan of care", and that the patient is unable to perform 2 or more activities of daily living without significant assistance due to severe physical or cognitive impairment.

Which of these Plans is Better for Me?

There can be complex tax issues involved, so it is recommended that a tax expert be consulted. Most consumers want to be eligible for the tax deductions available through a tax qualified policy. However, the tax qualified plans do carry restrictions on when the insured can receive benefits where a good non-tax qualified plan's benefits are less restricted.

Should I Choose Group or Individual LTC Insurance?

Both options have pros and cons. An employer group Long Term Care plan where the employer pays some or all of the premium can be a relatively inexpensive option. These plans are not always guaranteed renewable, most are NTQ (benefits are taxable), and the employer has the right to change insurers and benefits at any time. Some retirement funds will offer long term care insurance. Since these are not government regulated, they can change rates and benefits at any time.

An individual LTC Policy permits the buyer to choose the type of benefits he or she desires. Individual policies are guaranteed renewable for life and cannot be cancelled by the insurance company. The purchaser is responsible for pyaing p remiums. Premium payment options are usualy available, but most companies will charge a service fee for installment plans.

How are LTC Insurance Premiums Calculated?

The age and health of the person for whom the insurance is to be purchased, along with the amount of benefit and the duration of benefits, determine the premium. Most long term care insurance companies offer discounts for spouses, generally 10-25%. Most companies will offer options such as non-forfeiture, restoration of benefits, and return of premium. These options will add to the insurance premium.

What About Deductibles and Waiting Periods?

The deductible amount can vary and will impact the premium. Waiting periods can ary from 0 to 120 calendar days before payment of benefits begins. This also effects the premium. Careful comparison of benefits and premiums is recommended when shopping for Long Term Care Insurance.