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A Guide To Long Term Care and Long Term Care Insurance

Ross Menia

What is Long Term Care?

According to the National Clearinghouse for Long-Term Care Information, “Long-term care is a range of services and supports you may need to meet your health or personal needs over a long period of time.”

Long term care is often thought of as care reserved for the elderly, but it can be used by any individual who cannot perform the 6 actions listed below.

These 6 actions are known as “Activities of Daily Living”: • Bathing• Continence• Dressing• Eating• Toileting

• Transferring – Moving into or out of a bed, chair, or wheelchair. Transferring does not include the task of getting into or out of the tub or shower

What Options Are There For Long Term Care Facilities?

Assisted Living Facilities

Used by individuals who do not need constant medical attention

These facilities are not required to offer health care or have a skilled health care provider available at all times

Generally less expensive than nursing homes.

Community Care (Adult Daycare)

A non-residential facility that provides social activities, meals and various health care services

Provide services during business hours and on weekends

Less expensive than Nursing homes or Assisted Living Facilities

Nursing Homes Provide a wide range of personal and

medical care services for individuals who are dependent on others for daily living tasks

Nurses and workers are usually on site 24 hours a day

Residents in nursing homes don’t typically need the same care provided by a hospital, but they do need health care assistance each and every day

Generally the most expensive type of facility.

Home Care

Care Provided by family members or volunteers.

Medical care from nurses can be used as needed

The least expensive of Long Term Care facility options

Why Do You Need Long Term Care Insurance?

The cost of long term care has skyrocketed. Some examples of of long term care pricing for an individual (per year) is listed below: Nursing homes - $66,065 (not including therapy or medication) Assisted living facilities - $32,568 Home care - $16,000 Community care - $20,440

Currently, the 2012 nationwide average cost of long term care is  $7,100 per month or $85,200 per year

Individuals are living longer, meaning that more people will need care for a longer period of time

Adding Long term care to an employee benefit package is an attraction and retention tool, keeping more valuable and experienced workers within the company. Employers have the ability to offer this competitive advantage at significantly reduced premiums

As employees are retiring later in life, they want to know that they will have something to fall back on when they do retire

Advantages• Employees can keep their

retirement savings • Most insurance companies offer

group policy discounts• Groups may not have to meet

medical requirements, making for an easy underwriting process. This will also allow individuals to get a long term care insurance policy who normally cannot due to health issues

• There are large tax breaks for businesses who offer long term care insurance to their employees

• Workers can be better prepared for the unexpected

Disadvantages• Long term care policies

are expensive, especially as the applicant gets older

• You sometimes must health qualify for LTC. Meaning that, if you have pre existing health conditions, you may not be able to qualify for a policy

How much does Long Term Care Insurance Cost?

A basic plan with 5% Inflation protection (Per Year):

$649 for a 40 - year old $881 for a 50 - year old $1,802 for a 65 - year old $5,895 for a 79 - year old

A basic plan without inflation Protection (Per year): $300 for a 40 – year old $409 for a 50 – year old $1,002 for a 65 – year old $4,166 for a 79 – year old

* See “terms to know” slide for a definition of inflation protection

What are the steps to get a long term care policy?

1. Businesses and Individuals alike can contact a long term care specialist through one of the main LTC insurance providers. They include: Genworth Financial, John Hancock, Mutual of Omaha, and TransAmerica

2. File an application with an agent

3. Once your application has been received by one of the four companies, you will be placed in underwriting review. The underwriting process assesses the eligibility of the individual or group to receive long term care insurance benefits. Underwriting may require a phone interview or face to face interview by a nurse depending on the applicants age

4. Once the decision is made to either accept or reject the applicant, you will need to make a payment on the policy, and then pay the premium on the policy each year

5. When the times comes, you can file your LTC policy and receive it’s benefits

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Who Can You Contact For More Information?

TransAmerica Website: http://www.transamericaltc.com/Phone Number: 1-877-532-4910

Genworth FinancialWebsite: http://www.genworth.com/longtermcare/homePhone Number: 1-877-567-5824

Mutual Of OmahaWebsite: http://www.mutualofomaha.com/long-term-care-insurance/Phone Number: 800- 896-5988

John HancockWebsite: http://www.johnhancockltc.com/Phone Number: 1-800-270-1700

Important Terms To Know

Premium – The periodic payment made on an insurance policy

Maximum Daily Benefit- The amount that the individual will be reimbursed for each day of qualified care they receive. This may range from $100 to $400 per day depending on the insurance company

Elimination Period – The number of days you are responsible for paying the cost of covered Long Term Care services before your policy begins to pay benefits. Can be 0 day, 30 day, 60 day, 90 day, and 180 day

Inflation Protection – Provisions in a long term care insurance policy that increase benefit levels to account for anticipated increases in the cost of services.

Free Look Period - Period during which a new-policy owner is allowed to review and return the policy for full refund of the paid premium, while enjoying the insurance cover.

Reflective Note

This PowerPoint could be used by insurance agents as a marketing tool. The audience for this PowerPoint would be Small or Large businesses that may want to enroll their employees in a long term care insurance policy. It clearly shows the company what is being sold, how much it costs, and why it would meet their needs. The slideshow could then be viewed by the employees themselves to help them become more familiar with long term care insurance and make the decision easier.Portfolio note- I am very happy with how the

PowerPoint turned out. It gives an overview of long term care insurance yet it is concise. I could definitely use it in my portfolio. I could see one of our agents using a PowerPoint like this at my co-op company- Advanced Resources Marketing

Bibliography

Definitions & need for ltc . (n.d.). Retrieved from http://www.longtermcare.gov/LTC/Main_Site/Understanding/Definition/Index.aspx

Lenenberg, J. (2012). Learn about long term care . Retrieved from http://longtermcareinsurancepartner.com/

The difference between nursing homes and assisted living facilities. (2011, January 19). Retrieved from http://www.skillednursingfacilities.org/blog/life-in-nursing-homes/difference-nursing-homes-

Types of adult day care centers. (2011, July 25). Retrieved from http://www.adultdaycare.org/blog/adult-day-care/

National Association of Insurance Commissioners, (2009). A shoppers guide to long term care insurance. Washington D.C.: National Association of Insurance Commissioners.