FAQ - Long Term Care
Should I buy an LTC insurance policy?
Depending on your individual needs and circumstances, purchasing LTC insurance is part of a planning process for life and retirement. You need enough income to pay the premiums regardless of premium increases or life changes, such as the death of your spouse. You need to consider how long the benefits should last in relation to the premium you will pay. Most people with modest resources may be better able to pay for a policy with 1, 2 or 4 years of coverage rather than one with benefits that last as long as they need care. Also, if you have few assets, it may not make sense for you to purchase LTC insurance. Other options for paying for LTC include investments, savings, home equity conversion (reverse mortgage).
What is the best LTC insurance policy for me?
This is determined on a case-by-case basis. The benefits and amount of coverage an individual or couple needs depends on their unique circumstances. A single or widowed woman may need very different benefits than a married man, particularly if their economic circumstances are different. Women are more likely to live longer than men and more likely to live alone at the end of their lives. Without family members willing to provide home care and support services, women are more likely to receive LTC in a nursing home or assisted living facility.
If I move to another state after buying an LTC policy, will I still be covered?
Yes. The United States has the strongest LTC insurance standards and consumer protections; however, your policy's definitions of the places and people that provide LTC services may not match those in other states. For example, the assisted living facility in your policy is unique to your current state, it may not accurately describe assisted living facilities in other states. Another more general definition intended to describe care in facilities outside your state may limit the places where you can receive care covered by your policy if you relocate. If you move, you should contact the company that issued your policy to understand what services and facilities will be covered in your new home state.
What is a Partnership policy?
Partnership policy is an innovative partnership between consumers, certain states and participating insurance companies. Partnership policies meet all the requirements of state law as well as additional program requirements. Partnership policies have a unique state-guaranteed asset protection feature that allows you to retain a certain amount of your assets if you need to apply for Medicaid later in life. This is only available in participating states.
If I buy an LTC policy before my next birthday, will my premium be lower?
Not necessarily. Although companies base their premiums on age (the older you are, the more you pay), the difference in premium from one year to the next may not be significant. If the only reason you are buying a particular policy is to lock in a lower premium, you may not know enough about the policy. Professional LTC insurance agents at West Financial Group, Inc understand that this type of policy is one you will have for the rest of your life, and it's important that you understand how it works and be comfortable with the decision you make.
What is the right age to buy LTC insurance?
This is an individual decision, based on many factors. Most people think about LTC insurance when they are nearing retirement. Premiums are much lower for people in their 40s and 50s than for those over age 60. In addition, as people age, they are more likely to develop health conditions that may compromise insurability. After age 60, premiums for LTC insurance begin to rise steeply.
Do I really need inflation protection?
YES! Inflation protection should be included in every LTC insurance policy. These policies pay a fixed dollar amount for each day of care. Most policies are purchased decades before care is needed. A fixed daily benefit loses buying power each year. For example, in 14 years, a policy without inflation protection will only pay for half the care it pays for today, while the cost of care continues to rise each year. The difference between the LTC insurance benefit and the cost of care will come out of your own pocket. Inflation protection will help your benefits keep up with inflation. As the number of people needing care grows, the competition for caregivers and care facilities will fuel cost increases.
Will I be able to stay out of a nursing home if I buy an LTC policy?
Possibly. Having an LTC insurance policy does not guarantee to keep you out of a nursing home if that is the only place that can provide the appropriate care. Around-the-clock care at home is more expensive than nursing home care and may require more than one caregiver. If you have a comprehensive LTC insurance policy, it should provide you with protection in any setting, including care at home, in assisted living facilities and in nursing homes. While most people prefer to receive care at home, they may have no choice if their condition requires care in a facility.
Should I cancel my LTC policy if I can't afford to pay the premium?
Consider another option first. You can request a reduction in your policy's benefits in order to afford the premiums. You can reduce the daily benefit amount, the number of years the policy will pay or make other changes that will reduce the premium. If you have paid for LTC insurance for years, you probably won't want to cancel your policy. Instead, reduce your benefits and keep some of the coverage you have paid for over the years.
If my husband is showing signs of dementia, can I still get an LTC policy for him?
It's unlikely that an insurance company would issue an LTC policy to someone who already shows signs of cognitive deterioration. With other health conditions, it depends on the company's requirements. Some companies use strict health screening (also known as medical underwriting), while others will sell policies to people who have certain acceptable health conditions, but may charge them a higher premium.
Can I add benefits to the LTC policy I bought 20 years ago?
If you are still insurable and can afford to pay an additional premium, you may be able to add benefits to your LTC policy. You could keep the policy you have and purchase a rider that adds benefits to your existing policy, or buy a second policy. West Financial Group, Inc can help you add benefits to your existing policy or replace it. If you decide to replace the policy, a written comparison of the two policies will be provided in order to identify how the replacement will benefit you.
If you are no longer insurable, your policy will still pay for the benefits you purchased, but additional benefits will be unavailable.
Can my insurance company sell my LTC policy to another company?
Yes, insurance companies can sell their entire LTC business or a select group of policies to other companies. In addition, it is not unusual for insurance companies to acquire other companies. If this happens, your policy and benefits will not change. Your premium might increase if the new company uses different pricing assumptions than your previous company.