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Q: What is long term care
Long
term care is any type of care that a person
needs whether at home
or in a facility such as a nursing
home or an assisted living community …
Q: Why are most people unprepared for
the cost of an average long term care
stay? The
average stay today is 3 years
and the average cost in
the Baltimore
area (where I am based at, in other
areas it will be different) is about
$4,000 a month or $50,000 a year.
Fewer than 20% of those that
need long term
care are able to cover the cost for
just one spouse let alone both … The
reality is that most people cannot
save enough.
Q: What are the options? There are basically three options: Those
who are rich (w/more
than $1,000,000 to
$1,500,000 in liquid assets outside
of real estate), can "self
insure"
- For those who are poor (broke
with less than $2,500 in assets and
very sick) Medicaid or medical welfare
will cover the cost of long term
care
- For those caught in the middle,
private long term care insurance
is the most viable option
Q: What is long term care insurance?
Long term care insurance covers a
person against the costs of home health
care, community-based care (assisted
living, etc) and of course nursing
home care. It works in conjunction
with Medicare or private health insurance.
Q: Will Medicare cover me?
Not
for
very
long… For
those
that
qualify, Medicare will pay up to
100
days of LTC. The average length of
a covered stay in 1996 was 27 days.
Besides, do you want to rely on the
government? Remember also that they
pay the full amount for only the
first
20 days, after which you pay the
first
$81.50 a day.
Q: What are the odds that a person
will need LTC? According
to a recent study published in the
New England Journal of Medicine:
For a man over 65, the odds are
1:3 or 33% that he will need LTC
in his life,
For a woman over 65, the odds
are 1:2 or 50% that she will need
LTC in her life
Women are more likely to need LTC
because they live longer. Q: Can everyone qualify for LTC insurance? Unfortunately,
no. All the money in the world can’t
buy a LTC insurance plan. It takes
a little good health
as well. The best time to apply for
coverage is when you are healthy.
Your premiums will be lower and you
will
be more likely able to get coverage.
Q: How much does LTC insurance cost? Premiums
are based on three factors:
- Age
- Current Health
- What features you design into
the plan (there are five variables
in each plan)
Long term care insurance plans have
level premiums and are guaranteed renewable.
That means your rate is the same for
the life of the plan. Q. I've looked at a plan
- which inflation rider should I choose
if
any?
Choosing an inflation rider is based
on your age when you take out a policy
and your life expectancy...
Q.What
is Long-Term Care Insurance?
Generally
speaking, long-term care insurance
is designed to help you pay for the
day-to-day help you may require if,
because of an injury, chronic illness
or old age, you need assistance with
basic activities such as dressing,
bathing or eating--whether at home,
in your community, or in a nursing
facility.
Q.What
are the age limits?
Each
policy is different. Long-Term Care
Insurance can generally be issued
to older children and adults of any
age. Some policies limit the upper
age of eligibility.
Q.What
is the cost of Long-Term Care?
The
cost is based on your age at the
time of application; premiums vary
depending on the level of benefits
chosen and options selected.
Q.How
is the Benefit paid?
The
benefit is paid directly to the insured
or whomever he or she designates.
Q.Will
this insurance cover someone
with a pre-existing condition?
Once
the policy/certificate is issued,
most programs will cover all pre-existing
conditions. Some plans, however,
allow more less-healthy people to
enroll, but when it comes to claim
time, will deny more benefits because
of pre-existing conditions.
Q.Are
there health questions to answer
when enrolling in LTC insurance?
Yes,
but in some cases, if you are working
full-time (or could be if school
were in session), you may be eligible
for a streamlined underwriting procedure
where the evaluation of your health
condition is simplified. If you are
not working, then it is a good bet
the evaluation of your health condition
will be carefully reviewed.
Q.How
long is the underwriting process?
Generally,
it takes 30-45 days for processing
of your application and health questions,
provided the forms have been completed
correctly and all questions have
been answered. If additional information
is needed from your physician, the
process could take longer.
Q.Is
there any written material on
long-term care insurance that would tell
me
more about it and help me to
decide if I should consider buying a
policy?
Yes.
A very good booklet called the "Shopper's
Guide to Long-Term Care Insurance" has
been published by the National
Association of Insurance Commissioners.
You can
get one from NEA Member Benefits
by clicking on Consumer Guide.
Please see your licensed agent
for the NEA MemberCare Long-Term
Care Program for details regarding
other consumer guides and materials
your state may publish or which
are
available in your state. Q.How
can I find more information about
the financial condition of an
insurance company that sells long-term
care
insurance?
You
should always check on the financial
solvency of insurance companies
offering long term care or any
other insurance.
Independent rating agencies make
evaluations available to consumers.
The ones that are most often talked
about and respected include A.M.
Best, Standard & Poor's, Fitch
and Moody's. You can call the rating
agency, check your local library
or ask your agent to provide you
with current information. You
can also call NEA Member Benefits
for current information on suppliers
of programs for NEA members.
You should note that insurance ratings
are an indicator of stability and
not a warranty of an insurer's
current or future ability to meet obligations to
policyholders, nor are they a recommendation
of a specific policy
form, contract, rate or claim practice.
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