At what age should I start thinking about Long Term Health Care?

All individuals should begin to learn about Long Term Care Insurance in their 30's. While there are competing expenses at that stage of life, some review of the available plans and their costs should take place.if for nothing else, a solid understanding will most likely greatly benefit their parents who may or may not be up to speed on LTC Insurance. Certainly, by one's early to mid 40's, policies should be purchased so as to lock in the lower age rate structures, preferred health, and marital discounts.

Can I still qualify for Long Term Health Care Insurance if I have had Cancer?

Believe it or not, those who have successfully completed Cancer treatment without spread to other areas of the body can generally obtain LTC Insurance after one year from their treatment completion date. We have successfully helped many people who have had Breast Cancer or Prostate Cancer secure policies.

How much does Long Term Health Care Cost?

Long Term Care costs continue to increase each and every year. Fortunately, they have not gone up at the same alarming rate as Dr. visits or medical tests etc. However, you must understand that it will cost over $60,000 per year, on average, for just one year in a Nursing Home. It might cost close to that or even more if various levels of care are rendered in your own home by different care providers. Are you prepared for this type of expense?

Can you get Long Term Care Insurance through Your Employer?

A 2007 report showed that over 10,000 employers throughout the United States now offer or endorse some form of Long Term Care Insurance. This is great news as more and more people now have access to Long Term Care Insurance. These plans will typically be issued with marital and group discounts and sometimes are available to employees without medical review. Unfortunately, unlike other employee benefits that can be payroll deducted with pre-tax dollars, LTC Insurance can't be paid in the same fashion. So, without key education from employers, many people simply don't "sign up" for LTC Insurance since they don't understand its value and don't see a tax advantage. This remains a huge challenge and problem for the industry. Stay Tuned to Mensh Insurance.com for legislative updates that might change the tax landscape.

Benefit Amount

This is the amount that we select at the beginning that will be available to reimburse for actual care costs incurred in your home, the community, or in a facility. We know that the average monthly cost Nationally is around $5000. So, some will look to insure that amount knowing that there could be additional exposure. Or, some will look to scale back to $3000 or $4000/month to keep premium costs down and rely more on other assets and income.

Benefit Length

We can elect to have our Monthly benefit payable for 2, 3, 4, 5, 6, 7 years or even Unlimited Durations. This means that benefits are payable from the time of claim forward for that period of time. If one goes off claim the balance of the benefit remains available for future use.

In reality here, what is happening is that you are creating a pool of money…the sum of this pool is your monthly benefit amount multiplied by the number of years of benefit. So, if we have $4500/month for 5 years, we actually have a total reimbursement pool of $270,000…one can never have more than their benefit maximum paid in a single month, but, should one’s care costs be less than the monthly benefit maximum, only that exact amount will be paid to the insured. Crucial to remember, though, is that any benefits not used in a single month will remain in the pool and will theoretically lengthen your duration…For example, if we have the $4500/month maximum with a 5 year duration but our average cost for care during a period was $3000/month, the $1500 not used in those months allows for ongoing monthly reimbursements until the pool is exhausted.

Inflation Protection

All individual policyholders must consider an inflation protection feature. The most commonly used today is an automatic built-in 5% compound increase rider. This increases the monthly benefit by 5% on a compound basis for the life of the contract (even while on claim) on each anniversary date with no increase in premium. This feature’s cost is built into the level premium structure. Most people under age 65 will opt for 5% compound inflation protection.

One slightly different twist to Automatic compound inflation protection is from John Hancock and their Leading Edge product. Their compound increase is NOT a fixed 5%, however, it is tied to the CPI rate and will compound based on that figure each year…this number is typically lower than 5% and therefore, the premium cost is lower than the guaranteed 5%.

A second option is a 5% Simple increase option which works the same way but will not build benefits as aggressively over time.

A third option is typically referred to as a Guaranteed Purchase Option. This is a “pay as you go” type of plan where there is no automatic increase built into your policy. However, there will be annual or every third year options from the carrier to increase benefits without medical review. When such an increase is taken, there is an incremental increase in cost based on the new piece of benefit priced at your attained age…that is added to the original base premium. We see this and recommend this for those in their 70’s or for those who simply cant afford to build in the automatic features.

Elimination Period

This is simply the number of days that one self-insures the cost of care before benefits begin. The longer the elimination period the lower your premiums…this is the Deductible feature of a Long Term Care Insurance policy. As most are seeking to accept some risk, the majority will lengthen this period from an offered 30 days to closer to 90 or 100 days depending upon the company.