What is Long Term Care?
Why Should I Consider Long-Term Care Insurance?
How does Long-Term Care Insurance (LTCi) Work?
How do I design my policy?
What is the Cost of a Policy?
Could I pay for care from my savings?
Am I required to have a physical during the application process?
Who Does the Insurance Company Pay when there is a claim?
What happens if I pay an annual premium and I have a claim two months later?
Can my premium rates be increased?
I Am Young and Healthy. Why Consider Coverage Now?
Who is eligible and what are discounts?
Why did Spokane Public Schools offer individual plans instead of a group plan?
What is involved in a personal consultation?
When is the next educational workshop?
Does my employer pay for any of this benefit?
How is this billed?
What is Long Term Care?
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It is care required by a person due to an illness or injury that prevents that person from carrying out some of their activities of daily living. Care can also be necessitated by a cognitive impairment. Most of the time it is help with things like eating, dressing, bathing and getting around. Care can be administered in the home, nursing facility, assisted living facility or other community setting. Long-term care insurance (LTCi) has traditionally been thought of as nursing home coverage. However, the past decade has brought forth an evolution in this insurance that has significantly broadened coverage. Long-term care insurance plans may pay for:
Nursing Home Care
Assisted Living
Home Health Care
Therapist, Homemaker and Companion Services
Adult Day Care
Alternate Care Facilities
Hospice Care
This care ranges from assistance with activities of daily living at home to 24-hour skilled care in a nursing home.
Why Should I Consider Long-Term Care Insurance?
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If you have accumulated assets over the years, long-term care insurance is a sound method of reducing the cost of care. Many employers have been able to offer discounts as a way to encourage you to explore whether LTCi is right for you.
The statistics tell us that you have a great chance of needing care:
In 7 out of 10 couples, one spouse will need long-term care insurance. (US Dept of Health/Human Services - Brandeis University)
More than 12 million Americans need assistance with everyday activities. Of these, approximately 7 million are elderly, 5 million are working age adults and 400,000 are children. (GAO/HEHS - 95 - 109 Long Term Care Issues)
10 years ago, 7 million households reported having a family member who was giving care to someone else. Today that number is 22.4 million
Without long-term care insurance, you may have to pay for your own care. For many Americans this means spending down your estate until you qualify for Medicaid, the government welfare program. Today, many employers, financial planners, CPAs, attorneys and trust officers know that long-term care insurance is a viable way of protecting your assets, retaining your independence, maintaining your choice about how you will receive care, and avoid being a burden on your family.
How does Long-Term Care Insurance (LTCi) Work?
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When covered by a policy, you receive a daily benefit amount to cover the cost of a nursing home or assisted living facility stay, or skilled or custodial care in your home. You pick the daily amount, the length of time your policy pays, inflation protection and whether or not you want a deductible. If you cannot perform certain activities of daily living or suffer from a cognitive impairment, your policy will begin to pay benefits.
How do I design my policy?
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We have dedicated a whole section to providing information about all the components of a long-term care insurance policy. To learn more about choosing the policy that best fits your needs, return to the Home page and click on the blue "Features" button on the left side of the page.
What is the Cost of a Policy?
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A number of factors determine the cost of a policy. Listed below are several factors that can influence the cost of your policy:
Daily Benefit: The maximum daily benefit received for care. Most companies will offer a range from $40 per day to $300 per day in $10 increments.
Length of Coverage: Companies offer various lengths of coverage including a range of 2 years (730 days), 3 years (1095 days), 4 years (1,460 days), 5 years (1,825 days), 6 years (2,190 days) or Lifetime (unlimited). These lengths of coverage will give you a lifetime dollar amount. For example, 4 years of coverage at $100 per day will provide for a lifetime maximum of $146,000.
Elimination Period: This is most easily thought of as a deductible. It is the amount of days your must pay for coverage personally before the benefits in the policy begin to pay. Most companies offer a 0, 30, 60, 90, 180 and 365 day elimination period.
Inflation Protection: This automatically increases the daily benefit each year on the anniversary of the policy. It helps to ensure the policy you purchase retains its value over the years. Most companies offer a choice of 5% simple or 5% compound inflation. Watch out for companies who market a future purchase option as inflation proection. Over time this can become very costly. Be careful to purchase an age appropriate option. Purchasing no inflation protection at a young age can have devastating consequences.
Could I pay for care from my savings?
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For most people, the answer is no. Even if you have an emergency fund, today's medical costs and your living expenses can quickly exhaust your savings. What's more important, you may need your savings to pay for your other day-to-day expenses. For those who have accumulated larger estates, the question of self insuring can become a possibility. However, many of these individuals still need insurance to shift this large of a risk.
Am I required to have a physical during the application process?
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No. For most people, each company asks you to answer questions about your health on the application. For many, medical records are ordered from your doctor by the insurance company. Some companies may require a telephone interview to supplement your application. If this is required, the company will place a telephone call to you and you ask you about your personal medical history. For those individuals who are applying for coverage over age 70, a face-to-face assessment may be required. This is like a phone interview, but done in person by a nurse, who will also administer a cognitive assessment.
Who Does the Insurance Company Pay when there is a claim?
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Most companies will pay the benefit to you, unless you assign your benefits over to your provider.
What happens if I pay an annual premium and I have a claim two months later?
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The insurance company will refund or credit the balance of the premium to you and most companies will waive further premium requirements for eligible services while you are on claim.
Can my premium rates be increased?
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Premium rates can theoretically increase. However this occurs only if they go up on an entire classification of policyholders. Companies that practice competitive pricing, conservative underwriting and that are financially strong have the best chance of holding down rates in the future. Evaluating a companies track record is essential to the comparative process.
I Am Young and Healthy. Why Consider Coverage Now?
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Long-term care insurance is age-rated and health underwritten. This means you only get a policy if you are healthy; and the younger your are, the lower the premiums. True, you may have to pay for a longer period of time, but you will pay fewer cumulative premiums than if you wait. Because of substantially lower costs, people are starting to plan in their forties and fifties.
Age of application affects premiums significantly. However, there is also a hidden cost of waiting that most people don't think about. Today you might be able to buy a policy for $150 per day to cover most of the cost, but ten years from now, you would have to buy a policy for about $250 per day. Plus, you would be paying premiums at a rate 10 years older than you are now! That is, assuming you will still be insurable.
Who is eligible and what are discounts?
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A 5% discount is currently available with Unum/Provident's long-term care insurance plans for employees and retirees. These discounts are also available to the spouses, parents, parent-in-law, grandparents, grandparents-in-law, and adult children of employees and retirees. Although the current discounted carrier is Unum/Provident, Spokane Public Schools encourages all eligible participants to compare different insurance companies (see the Companies Represented button on the left side of this webpage). Consequently, Spokane Public Schools has designated David Wolf of Wolf & Associates, Inc. as our Long-Term Care Specialist. David's role is to help you compare the many different insurance companies that offer long-term care insurance and to assist you in determining which of these companies may meet your personal needs. Part of this process is to evaluate both your eligibility with different companies as well as the integrity of the product design for your familial and financial circumstances. Spokane Public Schools believe this kind of insurance needs to be personally tailored to each individual.
Why did Spokane Public Schools offer individual plans instead of a group plan?
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Spokane Public Schools believes that Long-term Care insurance is both an important and highly complex part of good financial planning. Our desire as a School District was not to offer a cookie-cutter solution to an issue that can have enormous financial ramifications. We have found that many employers endorse group long-term care plans that provide little to no integration with an individuals personal familial and finacial circumstances. In our observation, this lack of education and integration has lead to poor planning. In addition, there are many differences amongst plans. Our belief as a district is that our position is to provide both education, opportunites for good planning, and choice.
What is involved in a personal consultation?
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Spokane Public Schools has designed this process so that you can explore Long-Term Care insurance without pressure to enroll. This consultation is not an enrollment appointment. Instead it is your opportunity to explore. We understand that this may be a new topic to many of you and you may need to spend time with our Long-Term Care Specialist in order to learn about many of the related issues to long-term care. This educational consultation may assist you in evaluating whether this type of insurance is right for you.
When is the next educational workshop?
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For a schedule of ucoming workshops and other events associated with this voluntary benefit consult the calendar on the home page of this site.
Does my employer pay for any of this benefit?
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This benefit is a voluntary benefit. This means that the cost of any plan you design is your cost.
How is this billed?
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You may choose to pay a premium for any plan you design a on monthly, quarterly, semi-annual, or annual basis. Since Spokane Public Schools has chosen to provide you with the choice amongst many insurance companies, this is not a payroll deducted benefit.
