Long Term Care Insurance

Long-term care insurance (LTCI) is a type of insurance designed to cover the costs of services that assist people with chronic illnesses, disabilities, or other conditions that limit their ability to perform daily activities. These services are generally not covered by standard health insurance, Medicare, or Medicaid

A strategy to avoid depleting your retirement funds, avoid becoming a financial burden to family, allow family members to avoid the emotional and financial toll of caregiving, and ensure you can maintain independence and quality of life as you age.

What LTC Covers

A long-term care policy can help pay for a wide range of services and settings, including:

• Home care: Services from home health aides, therapists, or private-duty nurses.

• Assisted living facilities: Residential communities that provide personal care and medical services.

• Nursing homes: Facilities that provide 24/7 skilled nursing and care.

• Adult day care: Programs that offer care and supervision in a community setting.

Types of LTC Policies

There are three main types of ways to obtain long-term care insurance:

• Traditional Policies: These are "use it or lose it" policies where you pay premiums for a set period. If you never need long-term care, there is no payout.

• Hybrid (Linked-Benefit) Policies: These combine long-term care coverage with a life insurance policy or an annuity. If you need long-term care, you can use the policy's benefits. If you don't, your beneficiaries receive a death benefit.

• Long-Term Care Riders: This is an add-on to an existing life insurance policy that allows you to use a portion of the death benefit to pay for long-term care services.

Key Factors That Affect Cost & Coverage

The cost and benefits of a long-term care policy are determined by several factors:

• Your age and health: The younger and healthier you are when you buy a policy, the lower your premiums will be. Many people purchase a policy in their 50s or 60s.

• Benefit amount and duration: You choose a daily or monthly benefit amount and the number of years you want the coverage to last (e.g., 3 years, 5 years, or lifetime).

• Elimination period: This is the waiting period (e.g., 30, 60, or 90 days) before the insurance company starts paying for care. A longer waiting period will result in a lower premium.

• Inflation protection: This is an optional feature that increases your benefits over time to keep pace with rising healthcare costs.

Other important considerations

• Long-term care duration payouts (benefit period) vary by policy, ranging from a few years to lifetime coverage. Policies typically offer a set benefit period (e.g., 2-7 years), a maximum daily benefit, and sometimes a total maximum benefit pool. Your chosen benefit period and daily benefit amount, along with the actual cost of care, determine the total payout.

• The average long-term care (LTC) claim duration is 3.9 years. However, this varies, with some individuals needing care for less than a year and others for five years or more. A significant portion of claims (43%) last less than a year, while 15% of claims can extend beyond five years.

• This is an important consideration that can often be influenced by family history. For example, some patients afflicted with specific types of dementia can live up to 20 years far outlasting typical LTC benefit period coverage making policies that offer lifetime coverage more attractive

• Businesses can often realize some tax deductions on a portion of the LTC premiums on key employees. This varies depending on the business structure (C Corp, LLC’s, etc.)

For more information or to obtain a quote, please email us at LTC@healthwealth360365.com (or click the button below)