Learning About Long-Term Care Insurance
There’s wisdom in creating safeguards and safety nets that can catch you in the event of an unexpected fall—literally or figuratively. Long-term care insurance is one of the many safety nets that prudent people purchase to prepare for unexpected tribulations in life.
There is no right or wrong as to whether to purchase a long-term care insurance policy. Consider all related costs, your budget, your current risk(s), your age, your health and pre-existing conditions, other family members’ abilities to care for you in times of complete need. When performing this balancing act, only you can determine whether purchasing long-term care insurance is personally beneficial.
Learning about long-term care insurance can leave you wondering where to start.
The questions and ideas that follow can hopefully help you.
- Do you have pre-existing conditions that preempt your ability to receive coverage at standard rates or coverage at all?
- Do you have the option to purchase group coverage through your employer? What is included in the policy, if you do? What are the consumer safeguards, if any, for group versus individual coverage?
- If not, employed, or group coverage isn’t offered at work, how much money will it cost get the individual coverage you need? What levels of insurance are available to individual, prospective policyholders?
- What happens if your long-term care insurance company goes out of business or stops selling coverage?
- Are you okay with the idea of spending money on a policy that you may never use in the future?
- Which plans are over-inclusive, under-inclusive, and just right for you?
- How long can you wait to purchase a policy before the premiums change dramatically, based on age or health?
- What are the maximum, per-day amounts that various policies will pay?
- What is the maximum number of days or years that a policy will pay?
- Are there optional benefits that you may choose that tailor your policy to your specific needs? If so, do those additional benefits remain fixed so long as you are current on your payments, or do those additional benefits increase yearly with inflation?
These questions are just a start. A cursory Google search, with search terms like “long-term care insurance,” may also lead to a wealth of knowledge. You can filter this information by adding or subtracting other tailoring search terms, like “questions about long-term care insurance,” or “long-term care insurance companies,” or even “thinking about long-term care insurance.”
What Is Long-Term Care Insurance?
Long-term care insurance is designed to cover a future need for long-term service and support—this could include, but is not limited to, personal and custodial care, in-home care, nursing home care, adult day care, or care in assisted living facilities.
Long-term care insurance works by reimbursing policyholders up to a maximum number of dollars per day. These policies cover services that assist with activities of daily living that because of injury or illness now require the help of others—such as bathing, eating, dressing, toileting, transferring, and even moving around. Policies vary by the breadth of coverage and premiums to allow you to cater your policy to the services, options, and benefits that you need.
If you are already in poor health or are receiving long-term care services at the time you are seeking coverage, you probably don’t qualify for long-term care insurance. Sometimes, you may find options for less liberal coverage, or coverage at much higher than standard rates, or both.
Many long-term care insurance policies limit how much or how long benefits are payable. Make sure to inquire about time limits for the benefits before purchasing your policy.
Also, understand the way your premiums work. You may pay a fixed premium, which locks in the cost of your premiums for a certain period of time—sometimes until age 65, and sometimes for life. Other times, premiums are not fixed and they may rise, substantially. Request information regarding the company’s premium rate increase history. This will allow you to see whether fixed or non-fixed premiums are customary for the company in which you’re interested.
Significant Terms to Know
If you are interested in long-term care insurance, sample policies are available upon request. Request one. Read through the glossary or definition sections to gain insights into long-term care insurance terms, including how a specific policy may define:
- Informal caregiver – Any person who provides long-term care services without pay.
- Instrumental activities of daily living – Activities that are not necessary for basic functioning, but are necessary to live independently. These activities may include:
- Light housework
- Preparing and cleaning up after meals
- Taking medication
- Shopping for groceries or clothes
- Using the telephone
- Managing money
- Taking care of pets
- Using communication devices
- Getting around the community
- Responding to emergency alerts such as fire alarms
- Living will (also called health care directive, advanced health care directive, living will, or health care directive) – A legal document that specifies whether you want artificial life support if you become permanently unconscious or are otherwise dying and unable to speak for yourself. It also specifies other aspects of healthcare you want under those circumstances.
- Long-term care – Services and supports necessary to meet health or care needs during an extended period of time.
- Long-term care facility (also called a long-term nursing home or convalescent care facility) – Licensed facility that provides general nursing care to the chronically ill or those unable to take care of daily living needs.
- Long-term care insurance – An insurance policy designed to offer financial support to pay for long-term care services.
- Long-term care services – Services that include medical and non-medical care for people with chronic illnesses or disabilities. Long-term care helps meet health or personal needs. Most long-term care services assist people with activities of daily living, such as dressing, bathing, and using the bathroom. Long-term care can be provided at home, in the community, or in a facility. For purposes of Medicaid eligibility and payment, long-term care services are those provided to an individual who requires a level of care equivalent to that received in a nursing facility.
- Look back period – Five-year period before a person’s application for Medicaid payment of long-term care services. Medicaid determines if any transfers of assets have taken place during that period that would disqualify the applicant from receiving Medicaid benefits for a period of time.
- Medicaid – Joint federal and state public assistance program for financing health care for low-income people. It pays for health care services for those with low incomes or very high medical bills relative to income and assets. It is the largest public payer of long-term care services.
- Medical power of attorney – Legal document that allows you to name someone to make health care decisions for you if, for any reason and at any time, you become unable to make or communicate those decisions for yourself.
*These and other related terms and definitions are found at https://longtermcare.acl.gov/the-basics/glossary.html#long-term-care
Do You Have Long-Term Care Insurance? Was Your Long-Term Care Claim Wrongfully Denied?
At DarrasLaw, our long-term care insurance litigation firm has seen more, evaluated more, and resolved more individual and long-term care insurance and disability cases than any other firm in the country.
If you’re not sure whether a specific long-term care insurance policy is right for you—or if your claim was wrongfully denied—the top-rated long-term care lawyers at DarrasLaw offer free policy analysis and free claim consultations. Let’s discuss your options. Call DarrasLaw today at (800) 458-4577 or contact us online.