What is Long-Term Care?
Decades ago, few people understood what long-term care was all about. Longevity and advances in medical science have changed that. Long-term care refers to the various services and supports that help people maintain a better quality of life as they get older or suffer from chronic illnesses or disabilities.
These services include the medical and non-medical needs of individuals who can no longer care for themselves for an extended period.
This care could be actual "hands-on" or "stand-by" assistance. It can also be supervision due to a cognitive decline due to any form of dementia, including Alzheimer's disease.
Whether the need for long-term care is due to a chronic illness or mobility problem, accident, dementia, or the frailty of aging, quality care will promote a better quality of life.
However, long-term health care services are costly. These services are generally not paid for by your health insurance, including Medicare and Medicare supplements. Medicaid will pay for long-term health care, but only if you have little or no savings and income.
Professional long-term health care is expensive, and family members are typically untrained and unprepared for the stress and burdens of being a caregiver.
Who Will Need Long-Term Health Care?
With the advances in medical science, we all are living longer. Several research studies outline the statistical risk. More than half of us will need extended care. 58% of women age 65 and older will need long-term care during their lifetimes compared to 48% of men.
52% of people who reach age 65 generally qualify for benefits under a Long-Term Care Insurance policy. Policies require that you need help with at least two of the six primary activities-of-daily living or require supervision due to cognitive impairment.
Women tend to need care longer than men due to their life expectancy.
The risk of needing some form of long-term care service is high and grows as you get older. Long-term health care costs are growing rapidly and can adversely impact your income, savings, lifestyle, and legacy. Not to mention the stress and burden placed on those you love.
Family History
Family history only has a limited impact on your risk of needing long-term care; however, certain conditions like Alzheimer's disease, for example, tend to run in families. Some insurance companies will use a limited amount of family history in their underwriting process.
Advances in medical science allow us to survive illnesses and accidents more now than ever. However, this adds to our longevity. This longevity increases long-term care risk.
Who was it that was trying to tell us about those "golden years"? Luckily, the solution is easy and affordable despite the high cost of care.
Preparing for Retirement and the Consequences of Long-Term Health Care
If you are saving for a successful future retirement or you need to protect your current retirement assets. Affordable Long-Term Care Insurance could be your solution.
If you are wealthy ($5 million +), you might think you can self-fund. However, protecting your portfolio is very important. You can't time the markets, nor do you know when you will need long-term care.
Self-funding can be problematic if you have savings in investment funds or other assets that are not easily liquidated. There are tax considerations when using qualified or non-qualified funds. Not only would you be using your money to pay for care, but your cost could also be much higher depending on market timing and tax consequences.
If you are not wealthy but have savings you wish to protect, LTC Insurance can be helpful. Partnership plans, available in most states, provide additional "dollar-for-dollar" asset protection when you have a qualified partnership policy.
Wealthy or not, the burden placed on your family is still tremendous. An affordable Long-Term Care policy will ease the strain on your loved ones and provide guaranteed tax-free benefits. Guarantees are nice, and Long-Term Care Insurance has those guarantees.
Health Insurance/Medicare/Medicaid
Health insurance, including Medicare, pays for a limited amount of skilled services. These plans pay nothing toward long-term custodial care - the type of care most of us will need. What about Medicaid?
Your state's Medicaid program might be the best option if you have limited income and savings. For everyone else, a Long-Term Care policy is essential to a successful retirement as it will safeguard your 401(k), IRA 403(b), and other savings.
When to Get Coverage?
Most people get coverage in their 50s; many start planning younger. Older adults can get coverage if they have reasonably good health. Policies are medically underwritten, but each company has its own specific individual underwriting guidelines.
As you get older, the chance of having a health issue that limits or eliminates your ability to obtain coverage increases. Ideally, the best time to get coverage in force is in your 40s or 50s when you still enjoy good health.
Why Do You Need Long-Term Care Insurance?
The financial costs and burdens of aging will impact you, your family, your savings, and your lifestyle. A successful future or current retirement should include a plan to safeguard your assets and ease the burden long-term care places on your family.
The consequences are tremendous, but an affordable LTC insurance policy will add peace of mind.
Without a policy in place, you will be responsible for paying the total cost of care services from your income, perhaps draining assets and adversely impacting your lifestyle and your legacy.
Without a policy, your family will decide the type of care you will receive, where you will receive the care, and which accounts they will liquidate to pay for your care. Your loved ones may also be forced to provide some of the care themselves.
Will they make the same decisions about your care and your assets that you would make? Would you want to place the stress and burden on them or give them the time to be family?
You Have Options
Several different planning options are available. One or more will fit your goals and budget. These include:
- Traditional plans (including partnership plans which are available in 45 states).
- Asset-based plans, known as "hybrid" options, are available in every state. These are life insurance or annuities with long-term care riders and death benefits. Both single premium or limited premium, or annual premium options are available.
- Short-term/limited-duration cash indemnity plans are available in many states. They provide a more limited benefit but more relaxed underwriting and age requirements.
Remember, there are tax incentives available as well for some people.
The Impact Long-Term Care Will Have on Your Family
Without a Long-Term Care policy in force, the burden of caregiving falls on the shoulder of a spouse or family member, usually a daughter or daughter-in-law.
It may be very challenging for a spouse to be a full-time caregiver as they will probably be older when you need long-term care. Also, being a caregiver can impact their health and well-being.
For adult children, they will have their own jobs, families, and responsibilities. Although more men are becoming caregivers than ever, men are not usually the best at caregiving because of the very personal nature of the care. Would mom want her son to bathe her and take her to the bathroom, for example?
It is challenging for a daughter or daughter-in-law to be a spouse, a mom, have a career, and be a caregiver all at the same time.
An affordable Long-Term Care policy will usually provide case management, which will help the family be family. The case manager will help develop a care plan, arrange for caregivers, help find caregivers, and reduce the stress on your family.
Case management is not "managed care," and you are not required to accept their recommendations.
Many people want to have a choice when they need long-term care. You can decide where you will receive your care at home, adult day care centers, assisted living facilities, memory care facilities, or nursing homes.
Choice of Quality Care – You Decide
Quality care is a significant concern for most people. Affordable Long-Term Care Insurance will provide the resources for quality care options regardless of your choices for care.
One result of the COVID-19 virus crisis is many Americans saw the benefit of avoiding a nursing home. Yes, sometimes there is a need for this type of facility. When you have Long-Term Care Insurance, you will have funds to find a quality facility of your choice.
Often you can avoid a nursing home with quality in-home services, adult day care, assisted living, and memory care facilities.
Regulation
The federal government and the states jointly regulate Long-Term Care Insurance. That provides the policyholder with regulated benefit triggers, consumer protections, and tax advantages.
The trigger for accessing benefits is easy, and surveys suggest that most claimants are very satisfied with the process.
Many people want to protect their lifestyle and that of a spouse/partner. Others want to ensure their children and grandchildren inherit their assets and protect them from the Medicaid spend-down.
Finally, most people enjoy knowing this burden will not be placed on their loved ones. Be it your spouse or partner, adult children, and their families, having an LTC policy in place allows them the time to be family and not caregivers.
How You Get Long-Term Care Insurance
When researching and shopping for Long-Term Care Insurance, you must get accurate quotes and professional recommendations. Many insurance agents and financial advisors could give you a "quote." However, there are very few specialists with the knowledge and expertise in underwriting, policy features and benefits, tax incentives, knowledge of state partnership programs, and claims experience. A specialist will give you accurate quotes along with professional recommendations.
Few employers offer Long-Term Care Insurance as an employee benefit. Companies that provide an employee benefit have minimal plans or plans that, for most people, cost more than an individual plan.
Experienced. Qualified. Trusted.
Matt McCann has been helping people nationwide since 1998 find affordable solutions for the financial costs and burdens of aging. Matt is endorsed by the American Association for Long-Term Care Insurance and represents the insurance industry's prominent brand names.
A nationally known speaker and expert in long-term care planning, Matt McCann is ready to give you accurate quotes and professional recommendations so you can safeguard your 401(k) and other assets from the costs and burdens of long-term health care.
You will also save money when working with Matt McCann since premiums vary over 100% between companies for the same coverage.
Long-Term Care Insurance is medically underwritten. You must have reasonably good health to be eligible to obtain a policy. These requirements vary from company to company. It also varies depending on the type of plan (traditional, hybrid, or short-term).
It is a Process
We first start by asking many detailed health and financial questions to determine eligibility and suitability. If appropriate, we set up a quick meeting using our unique screen-sharing technology. You will see my computer screen, although I won't see you. This way, I can ask these important questions and explain how the policies work, including the federal/state partnership information, tax incentives, and more.
You will be able and encouraged to ask questions as well. This way, appropriate recommendations can be made based on your situation, so you have something specific to consider.
The goal is to find an affordable plan to address the consequences of long-term care. Since we work with all the top companies, we will be able to shop for the best coverage at the best value. This process is one-stop planning, which makes the process much more comfortable and less stressful.
Remember, each insurance company sets its pricing, which your state's insurance department must approve. No insurance agent can "give you a deal." Premiums are also affected by age, health, family history, amount of benefits purchased, and other factors.
Premiums can vary well over 100% between companies for the same benefits. Working with a specialist representing major insurance companies helps save money.
If you like one of the options, you must apply to see if you can get approved. The process is easy since most companies have electronic applications. The underwriting can take 6 to 8 weeks to complete.
Often, they will include a telephone interview. Depending on your age, this interview could be in person. They will only draw blood or take urine if you have not been to a doctor in a very long time.
Once approved, your policy will be mailed to you. We will set a time to review your benefits and make, if you wish, make any changes in the amount of coverage.
If you get declined, we will find alternative options depending on the reasons for the decline.
Read a more detailed explanation of the application process by clicking here.