It is important that you realize that long-term care costs have been rising for years—and it is important that you make sure that you have a plan in place to attain the coverage that is necessary for your future success—whether it be by an insurance policy—or self-insurance—on your part!
Long-Term-Care (LTC) insurance has the potential to provide you with the coverage that you need during your—or your spouses stay—at a nursing home.
You must understand that as you age into your late 70's and early 80's your likelihood of LTC increases substantially. LTC can often last—on average from 1 to 3 years as you enter your 80's—and the costs of LTC insurance has been rising substantially in recent years.
Many big name—as well as lesser named insurers have underestimated the proper cost of LTC as policy premiums have been rising in the last few years at a high level.
Even so, if you have a policy you want to make sure that you continue the policy—in most cases.
You must understand that purchasing another policy could be even more costly—as costs are rising fast in the LTC insurance environment. Your costs will further rise as you age—and as you age—the policies get even more pricier than the one that you may currently have with your current insurer!
You must understand that policies purchased when you were age 50 in say—2003 with a 5% inflation rider and a monthly benefit of $6,000—and an annual premium of $3,000—could easily double within 10 years to almost $6,000—with your current insurer
If you were to purchase a new policy—now at age 60 you would pay close to $10,000 in annual premiums—with monthly benefits of approximately $10,000!
Be sure you are aware of all of your options—such as reducing your premiums by reducing your benefit period, reducing your lifetime benefit period—reducing your inflation protection from 5% to 3% and other options that you may have based on what your particular insurer offers!
If you have an insurer that has recently notified you that they are pulling out of your market—it is important that you understand that they still must pay your benefits. Even if your current insurer is bought out by another company—the new company must still make the required payments.
Also if your monthly payments get difficult for you—consider a shared benefit policy if you are married—or cutting back on benefits in other areas!
You must be keenly aware that LTC insurance premiums are projected by many in the industry to increase by about 20% every 5 years—be sure to factor that into your future financial projections!
It is also important that you work with an agent that is seasoned in the LTC arena—because the price difference among insurers can vary by large amounts!
Major players in the industry include: Genworth, John Hancock, Mutual of Omaha, MassMutual, New York Life and Northwestern Mutual—among others!
Make sure you are as healthy as possible when you shop for your insurance as the healthier you are—the better the rate that you will get.
LTC insurance is mandatory if you are not on track to have a nest egg of several million dollars—or you won't qualify for medicare.
It is imperative that you look at your LTC concerns in your early 50's—at the latest—and make a realistic assessment of whether you will reach your goals and will not have a need for LTC—or you need to properly purchase a LTC policy.
Be sure you have an adequate understanding of what your policy covers so that your claim won't be denied!
Most policies include a deductible or elimination period—be sure you know the elimination period (number of days after you file a claim that they will pay for services—20 days, 60 days, 90 days or some other time frame) and be sure to file your—or your loved one's—claim at the first sign of a problem as the process could be time consuming.
As a claimant—you or your loved one
—must prove that you are cognitively impaired
—or need help performing daily activities. In most cases a licensed health care provider will have to confirm your or your loved one's disabilities "in writing."
Be sure that the health care provider notifies the insurance company to contact the advocate (usually other family member)—and not the patient—as they may have decreased mental abilities.
In addition be sure you know the caregiver requirements in your policy. Must the caregiver be licensed? Does your State require that they be licensed.
Finally be sure to keep adequate records of phone calls, mail, email, text—and any other communications—as they could be helpful if your claim is denied and you have to seek legal proceedings!