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long term care insurance

Ten Benefits of Long-Term Care Insurance

September 2, 2009

in Personal Finance

Long-term care isn’t something we tend to think about before the need arises. Some assume that they won’t need it for one reason or another. Others just don’t want to consider the possibility that they might. But according to research by Conning and Company, 60% of those who reach age 65 will eventually need long-term care.

A growing number of people are purchasing long-term care insurance to cover their needs as they age. Still, these people are in the minority. If you’re on the fence, here’s a list of ten important benefits of long-term care insurance for your consideration.

1. Long-term care insurance can help protect your assets. A stay in a nursing home is one of the most frequent reasons that the elderly lose their homes and other property. By having long-term care insurance, you can reduce your chances of having these things go up for sale instead of being there for your heirs.

2. A good policy will pay for more than just nursing home stays. More and more policies are now covering assisted living, home care and respite care expenses. So even if you don’t want to end up in a nursing home, long-term care insurance can be beneficial.

3. Long-term care insurance gives you more choices when it comes to long-term care. If you rely on Medicare or Medicaid, your options will be severely limited. You may not even be covered depending on your situation. With long-term care insurance, you can choose your facility or caregiver.

4. Providing for long-term care eases the burden on your family. You won’t have to worry about your spouse or children endangering their health or disrupting their lives to provide care for you around the clock.

5. You may be eligible for tax deductions if you purchase long-term care insurance. Those who itemize deductions may deduct premiums that exceed 7 ½ percent of their adjusted gross income.

6. If you receive benefits from your insurance, they generally are not considered taxable income. Currently, the main exception to this rule is that policies that pay a certain amount per day are taxed if the exceed the maximum allowable amount. This limit is adjusted periodically for inflation.

7. You can adjust your policy to fit with your budget and needs. You can choose the maximum number of years for which care will be covered. Many insurance companies also offer inflation protection for an additional fee.

8. You don’t have to pay premiums from a young age. Purchasing a policy at age 50 will give you a reasonable rate. After age 50, however, premiums rise considerably for new policyholders.

9. Insurance companies generally offer lower rates for couples who purchase a policy together. Check with your insurance company to see if they offer such a discount.

10. Long-term care policies are offered through some employers. These policies usually come with lower rates than you would pay for an individual policy.

When it comes to insurance, there are good policies and bad policies. Long-term care insurance is certainly no exception to this rule. It’s important to do your research and find a policy that provides good coverage. Doing so will help you rest assured that your long-term care needs will be met when the time comes.

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What does Long-Term Care Insurance Cover?

June 28, 2009

in Personal Finance

Long-term care insurance was developed specifically to cover costs of any long-term care services. These include those not covered by any traditional health insurance plan or Medicare. Included services can be received in your home, such as assistance with Activities of Daily Living as well as any care received in any facility or community setting.

The most popular options summaries and choices are:

* Your own selected daily benefit amount (i.e.$100/day), being the maximum daily amount for care paid for by the policy. With the variety of policies, this could range from $50/day to as much as $500/day.  More policies are starting to specify benefits in terms of a monthly amount to allow for flexibility as to when you will require more care, such as when family members aren’t available to assist you.

* You are often able to choose if you want the policy to pay the same amount for care in all settings, or less for care where it is less expensive, such as in a home setting. This could be changed to 50-75 percent of what you would normally pay in a nursing home setting.

* You have the opportunity to choose the type of coverage you prefer ? comprehensive or facility care only. Comprehensive policies cover a wider range of settings in which you can receive care and services, such as at home and in various types of facilities.

* Many policies offer you additional optional benefits allowing for a more customized coverage. One of the most important is Inflation Protection. This will help protect you from any rising cost of health care over time. Be sure to talk to your insurance representative about this option before completing your application process.

Many policies may also pay for services or devices to support people living at home:

* In-home monitoring systems
* Grab bars, ramps and other home modification
* Assisted transportation to and from medical appointments
* Training courses for friends or relatives in order to provide personal care safely

What is not covered by long-term care insurance?

As with all insurance, long-term care policies have exclusions. These often follow particular state regulations on which exclusions are allowed. Long-term care policies typically exclude the following (even if you meet all the other requirements of the policy):

* Any care or services provided by family member is not covered. The only exception to this is if the family member is an employee of the facility or organization providing a particular service, and receives pay for services in the form of normal compensation such as a pay check.

* All care and/or service provided outside the USA, unless your policy has an international care clause allowing the patient to seek treatment outside the USA.

* Any care or services resulting from attempted suicide (no matter what the mental capacity) or intentionally self-inflicted injury.

* All services or care provided for treatment of alcoholism or drug addiction (except in cases of addiction to prescription medication when administered according to your physician’s advice).

* All treatments provided in any government facility (unless by law).

* Any services available under any governmental program such as Medicare (except Medicaid), workers’ compensation, employer’s liability or occupational disease law.

There are some policies providing coverage for everyday household needs such as housekeeping, laundry, managing medication, meals and other items required for daily activities. However, these are only available if you receive funds for Activities of Daily Living.

As a final note, long-term care policies will not pay for anything related solely to comfort or convenience. Some examples of these would be a television in your room, or visits to the hair salon (normally located in the nursing home).

By paying close attention to what your needs and desires really are, and comparing them to your present insurance policy, you may find it necessary to make some changes or additions to what you are covered for, and what you aren’t. This will make sure there are no unexpected surprises or disappointments later on.

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National Association of Insurance Commissioners

June 7, 2009

in Personal Finance

The NAIC was established in 1871. Located in Kansas City, New York, and Washington, D.C., NAIC addresses the needs of insurers and develops a uniformed system of management relating to these insurance companies. This provides an essential forum through which consumers are both protected and given comprehensive information and tips on their insurance needs.

It is comprised of insurance regulators from every state in the U.S. whose main mission is to protect consumers as regards insurance and consumer-protection areas.

In addition, the NAIC educates consumers about all types of insurance including auto insurance, life insurance and home insurance, as well as explaining Medicare supplement, long-term care insurance, cancer insurance, and annuities.

The NAIC’s Insure U functions as an educational program that helps consumers and small business owners learn fully about the ins and outs of insurance, as well as giving consumers the basis by which they can better determine their options.

Moreover, NAIC also has a section on their website where consumers can file a complaint. In addition, the Consumer Information Source enables anyone to check on an insurance company. The information given includes any complaints filed against the company, information on their license, and other important data.

This serves to help the consumer make a list of those companies they may wish to contact to compare and contrast insurance rates.

More importantly, NAIC also has a website feature where the consumer can obtain the most common complaints made on an insurance company by categories. These include reason for complaints, type of insurance, and how the complaints were resolved or the disposition. These complaints include such items as claim handling, underwriting, and service.

This information is provided by state insurance departments and is a vital resource in finding a suitable insurance company to meet your needs.

NAIC has become an invaluable resource for consumers who need the latest information on health and travel insurance, flood insurance, renters insurance rates, insurance companies, and tips to prevent insurance fraud. It is well worth book-marking for updates and future perusal.

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