Resources
Long Term Care Insurance Overview
The problem
Long term care claims result from a prolonged physical illness, disability or cognitive impairment, such as Alzheimer’s disease. Medicare and health insurance policies do not pay for nursing home or at home nursing services. This creates a major financial exposure as an ‘average’ long term illness can cost $400,000 or more currently in California. These costs are increasing every year.
The solution - Long Term Care Insurance
All of us make financial plans for the future, be it retirement or protecting against a catastrophic loss to property. As we live healthier and longer lives, our potential for a long term illness increases. But how do we protect financially against a long term illness? The answer is to apply and purchase a Long Term Care policy for your client’s and/or their parents.
I already have coverage through my medical plan or Medicare will cover when I'm older.
There is some coverage with medical plans or Medicare, however they are limited:
• 100 days of care is covered in part on most health plans typically after a hospital stay
• 15% of 85 year olds in CA need some type of long term care services
• In 2010, it is estimated that 5.1 million Americans will have Alzheimer’s Disease; in 2050, it will rise to 13.2 million.
• 8% of residents in CA nursing homes are age 55-64, 31% are 75-84, 31% are 85-94
How can a Long Term Care policy protect my client?
Long term care coverage provides a reimbursement or cash benefit to use for paying a licensed home health care worker, nurse, assisted living or nursing home care provider. Policies typically provide a daily benefit of care for a set number of years. This builds into an asset your client can spend against for future care.
• Average cost in CA for nursing home care is $220 per day
• Full time “24/7” unskilled care givers can cost $15 an hour or $360 per day
• At home care is costlier than a nursing home, most would rather pay to stay home
• High end nursing homes can top $200,000 a year
• Policy options include inflation protection, payment plans and various benefit levels
What triggers a claim?
A medical doctor or an insurance companies care assessment team can help determine if long term care services are needed. Many times the insurance company can help in coordinating care givers. To trigger a claim, a policyholder needs to have limitations of 2 of the 6 Activities of Daily Living:
• Eating
• Transferring from chairs and/or bed
• Continence
• Dressing
• Tolieting
• Bathing
Who needs it?
It is difficult to predict what our specific long term care needs will be. However, having Long Term Care insurance allows us to pick our level of care, where it is given and with whom. It also allows us to leverage today’s income to protect against a future risk of outliving our assets. The ideal age to apply for Long Term Care coverage is in your 50’s.
Contact Jill Jacoby for more information or to request quotes - by phone at 818-933-2778 or via e-mail.
