Frequently Asked Questions
What are the most important things to know?What are the biggest mistakes to avoid?
How come I’m just hearing about long-term care?
How many people have long-term care insurance?
What is long-term care (LTC)?
I'm never going to a nursing home; why am I reading this?
What are my real chances of needing long-term care?
What do long-term care services cost?
What's the best age to buy this insurance?
What if I never need my long-term care insurance?
If you are thinking about long-term care insurance, here are the most important things to know:
1. You must health-qualify for long-term care insurance. Not everyone can. Because health changes, especially as you grow older, it's smart to look into this well before you reach retirement age (your 50s are generally the best time to start).
2. Long-term care insurance can be far more affordable than most people think. Cost is an issue; so you need to know there are many ways to make this protection affordable.
3. Rates (Premiums) can vary significantly from one insurer to another. Each insurer has pricing "sweet spots" based on your age when applying. Available discounts and options can vary too. It's a reason to work with someone with access to policies from multiple insurers.
4. Health qualifications can also vary from one insurer to
another. If you're in great health, don't use tobacco products,
take no medications -- then every insurer will accept you. Each insurer
sets their own health-qualifications and they change from time to time.
Be prepared to share information with an insurance professional. You
want them matching you with the company offering the best protection for
the best price.
5. You're only going to buy long-term care insurance once.
Deciding to buy long-term care insurance is a financial and emotional
decision. But, it's different than buying car or home insurance, which
people switch from time to time. It's almost never economically
advantageous to switch (primarily because costs are based on your age at
application). Many people sell long-term care insurance. Make sure you
work with someone who really knows this business. It will save you money
and yield benefits for many years to come.
Isn't this our biggest fear when making a purchasing decision; making a mistake we'll regret. That's why we read Consumer Reports and research online.
So, when it comes to long-term care insurance, what are the biggest
mistakes to avoid?
1. Waiting too long to start planning. You don't have
to buy insurance protection today; but at least find out what a policy
will cost. If you take prescription medications or have health
conditions, find out if you can health qualify. Ask what health changes
might make you ineligible to health qualify.
2. Believing it won't happen to you. Denial is the best reason not to plan. And, honestly, we hope you live a long life … never have an accident or illness. Yes, we hope you never need long-term care. We also hope you never have a car accident. But hope is not a strategy. Planning for the future is.
3. Counting on government programs. If you are 50 or 55, are you really ready to count on Medicare and Medicaid being able to pay for the care you want in 15 or 20 years. Everyone wants someone else to pay the bill. If you prefer having choice, options and independence, then you'd better have a plan in place … just in case.
4. Not working with a long-term care insurance professional. As you'll find us saying many times, costs vary between insurers, discounts vary between insurers and acceptable health conditions vary. You want to work with an experienced and knowledgeable professional who stays current and can get you the best coverage for the best price. Are we biased in favor of our Association members? You bet!
How Come I'm Just Hearing About Long-Term Care?Long-term care is new and that's simply because we're living longer lives, into our 80s, our 90s and even 100s. When you live a long life, chances are you're far more likely to need long-term care.
The average life expectancy in the United States did not reach 65 until about 50 years ago. The average life expectancy now is well over 70 for both men and women. And, the fastest growing group in the United States is people over the age of 85. Experts estimate that by the year 2040, we will have over a million people in the United States over the age of 100.
So, this is a new issue that your grandparents and (depending on how old you are) your parents didn't have to deal with. But, if you live a long life … you're going to need to have a plan for the risk of needing long-term care.
Your Life Expectancy At Age 65
As people age, their life expectancy actually increases. Each year you
live, you have survived all sorts of causes of death. If you were born
in 1943 (65 years ago at this writing), your life expectancy at birth
was about 68 years. Once you reached 65, you can expect to live another
18.4 years. Your current life expectancy is now 83.4 years.
Your Life Expectancy At Age 75
If you make it to age 75, your life expectancy increases to 86.8. It's
not funny math, its just one of the weird things that statistics does.
Last year, the nation's long-term care insurers paid out some $3.5 billion in claims to 180,000 individuals. That's an increase over the prior year. You can see some of the real stories from real people on our Website. What is Long-Term Care (LTC)?
Long-Term Care includes a wide range of medical and support services for people with a degenerative condition (say Parkinson's; or those that occur after a stroke), a prolonged illness (cancer) or a cognitive disorder (Alzheimer's).
If these make you think of conditions that affect older individuals,
you are right. Most people need long-term care in their later years
(typically their 80s).
But, younger people need long-term care as a result of accidents
(falling off roofs and motorcycle accidents especially for men) or
illnesses that tend to inflict younger people like Multiple Sclerosis.
Long-Term Care is not necessarily medical care but rather "custodial care." Custodial care involves providing individual assistance with activities of daily living or the supervision of someone who is cognitively impaired.
To better understand Long-Term Care, think of the activities that you
performed when you woke up this morning. You probably stepped out of
your bed … walked to the bathroom … used the toilet … took a shower …
got dressed … ate breakfast.
When you are healthy it is easy to take for granted these Activities of
Daily Living (ADLs). However, when you or a loved one is stricken with a
degenerative condition such as a stroke or Alzheimer's, performing these
ADLs becomes impossible without the assistance of another person. As we
age, performing these simple functions becomes difficult; often
impossible.
This type of care is what Long-Term Care means. It is the same type of care that a parent must provide for their new baby. This type of care is chronic (full-time) and thus becomes very expensive. Long-Term Care can be provided in many settings including nursing homes, your own home, assisted living facilities and adult day care.
I'm Never Going To A Nursing Home; Why Am I Reading This?Say the words long-term care insurance … and chances are you think nursing home. Today, that could not be farther from reality. Today, long-term care insurance really means home care coverage.
It is true that the earliest policies issued in the 1980s generally paid for nursing home care.
But, today, one of the most significant benefits of long-term care
insurance is the ability to receive care in your own home. And, almost
half of all long-term care insurance benefits pay for home care. Here
are some current facts:
There are some 7.6 million individuals currently receiving care at home.
And, 43 percent of all individual long-term care insurance policy
benefits went for home care.
Another 1.0 million Americans live in assisted living communities. And,
32.9 percent of all individual long-term care insurance policy benefits
went for assisted living care and costs.
Some 1.8 million Americans live in nursing homes. Many are there
because Medicaid (the federal poverty program) pays for care in nursing
homes. Only 24.1 percent of long-term care insurance policy benefits
paid for nursing home care.
* Source: 2008 LTCi Sourcebook, American Association for Long-Term Care
Insurance).
We can share with you a ton of great statistics provided by
government and independent researchers (and we will). But none of it is
really relevant to predicting whether you are going to need long-term
care. Your chances are going to be zero … or 100 percent. As Clint
Eastwood would say, "are ya feeling lucky?" We'd rather say, "isn't it
smarter to do a little planning … just in case."
But, for those who like statistics, here's one of the best studies we've
found.
Estimated Years Of Needing Long-Term Care After Turning Age 65
More than 5 years 20%
2 to 5 years 20%
1 to 2 years 12%
1 year or less 17%
None 31%
Draft. year in a nursing home now averages more than $40,000 and can
exceed $100,000 annually in some parts of the country." - The Wall
Street Journal 3/31/99
Obviously Long-Term Care services are very expensive. Quality nursing
homes are always filled to capacity and they are consequently able to
command a hefty fee for services.
Home care is also expensive. Bringing a home health aide into your home
every other day for a 4 hour visit can easily cost $1800 per month. When
the home care approaches 8 hour visits every day, the costs rise to
$7200 per month. At this point, the care recipient begins to receive
facility based care simply for economic reasons.
Today is the best time to buy
What If I Never Use My Long-Term Care Insurance?People seem to have the mindset that if they buy long-term care insurance, they had better use it (or they'd be wasting their money).
These same people would never say, "I'd better total the car this year, or that car insurance was a total waste!" … or "Gosh, I hope my home burns to the ground because I've been paying premiums now for 10 years."
Get the picture. A lot of the media coverage about long-term care insurance has created the mindset that you had better use this. The truth is, long-term care is not for sissies and you really don't want to find yourself needing long-term care. If you purchase long-term care insurance, consider yourself lucky. If you buy it and you do need it … you should also consider yourself lucky.
See, it's one of those true win-win situations.