What is Long-Term Care?
First let’s define Long Term Care (LTC) – LTC is a service or range of services provided to those who are no longer able, or have difficulty, performing two of six activities of daily living, such as getting out of bed, dressing, eating, or suffer from severe cognitive impairment, and the condition is determined by a medical professional to last at least 90 days or longer. This can be a result of illness, aging, or an accident, and can therefore affect anybody.
Some important statistics:
- Almost 70% of people over 65 will need long term care services at some point.
- 3.9 years is the average length of long term care claim lasting longer than one year.
- 4-8 years is the average life expectancy after Alzheimer's disease diagnosis.
Long-Term Care Key Considerations
There are several key items to consider when looking into Long-Term Care, including:
- Age: Some products have limitations as to when you can buy protection based on your age.
- Health: Almost all options require underwriting, which could make some options unavailable
- Cost: For several options, the older you get, the costlier the protection
What are your Options?
1. Self-funding, including private/family support, public programs, use of your assets
2. Tradional Long-Term Care Insurance
3. Linked Benefits
4. Life Insurance with an accelerated benefit rider for long term care services
Long-Term Care FAQs
1. What is Long-Term Care (LTC) Protection? It is protection in the form of insurance or an annuity that pays for your care if you suffer from a condition that lasts 90 days or longer, according to a physician’s opinion. This can be a case of cognitive impairment, such as Alzheimer’s disease or having difficulty with, or not able to perform, two of six activities of daily living.
2. When is the best time, what age, to buy LTC Protection? The best time to buy LTCI is when you can afford it and qualify for it. Some recommend 55 as the ideal age, however, if you have a stroke at age 50, you are no longer eligible to buy traditional LTC Protection.
3. I don’t want to go to a nursing home, does this type of coverage allow me to receive care in my home? Yes, LTC Protection does provide coverage for home care, though generally not 24/7 care.
4. Is Long-Term Care expensive? Well, it is all relative. Plans can be designed to fit your budget. But the question should be does it make sense to pay pennies on the dollar for care? Most would respond with “yes”.
5. I have some health issues; can I still qualify? It depends on the issue and how long ago it occurred. Usually, it is not one issue that causes a decline in the application, but rather a combination of issues. So, if you are interested in obtaining coverage, it is recommended that you set an appointment to discuss those issues and determine if you qualify, and then if it makes sense.
6. If I buy LTC protection now, but wish to retire in another state or country, will it cover me? That depends. All coverage will cover you in other states, but not all plans cover you when you live overseas.
7. I have applied to Long-Term Care and been declined in that past. Can I still qualify? Depending on the reason you were declined, it could be six months to five years before you can re-apply to buy traditional LTC Protection. However, there are products that allow you to buy protection regardless of your health.
8. Are there alternatives to traditional LTC Insurance? Yes, there are. These could be insurance-based products or annuities.
9. Which company offers the best plans? This is subjective, as almost all plans offer variations based on a platform. All companies have different underwriting processes as well. Like with other insurance products, the best plan seems to be the one that provides the best value at the for the right reasons.
10. Once I buy LTC protection, do the premiums remain level, such as with level term insurance? It depends on the type of protection you buy. In some cases, the premiums are guaranteed, for others not. Some are also guaranteed for a limited time.