Frequently Asked Questions About Long-Term care

Long-term care services costs vary by region.  Care in New York City will be more expensive than Alabama.  According  to a 2014 Cost of Long-Term Care Survey performed by New York Life 1, the average rate for a home health aide runs about $22 per hour.  The average cost for a one-bedroom unit in an assisted living facility generally cost around $4,100.00 per month.  That is a staggering $50,000 per year.  The average annual cost of a nursing home is $96,000 per year.  Studies have shown that the average American uses a combination of these facilities in their lifetime. In combination, on average, three years of assisted living plus two years in a nursing home could cost you and your loved ones $300,000!

1 New York Life Cost of Care Survey, 2014, http://www.newyorklife.com/products/Long-Term-Care/nyl-costs-of-ltc-survey

You may not need as much Long Term Care Protection as you think.  A little can go a long way.  Policies can be customized and used in combination with other methods to achieve personal goals. Several factors go into designing a plan that works for you: What level of coverage you may need, The length of the waiting period, rider, and any variation of inflation options you may need.

Limited long-term care services may be covered by government-run programs such as Medicare and Medicaid, but these programs have strict qualification rules and coverage limitations.

Medicare: May cover up to 100 days of skilled nursing home care if certain conditions are met, but it’s not designed for the long-term. Medicare does not pay for homemaker services or home health aides, nor does it pay assisted living costs.

Medicaid: Skilled nursing home services, and some home and community-based care for low-income Americans may be covered, but beneficiaries must meet strict federal and state guidelines for income and assets. So, you may need to start by paying out-of-pocket and qualify only after you spend down enough of your assets. And your options may be limited, as not all nursing homes accept Medicaid patients, and Medicaid may restrict which nursing homes are available to patients.

Long-term care services are not generally covered by private health insurance

Some insurers offer riders that can be selected at the time of purchase.  These riders may not be available everywhere, and they do add an extra cost to the policy.  They work like this:  In the event of your death, the premiums you paid, minus any money paid out, will be returned to your estate.

Thirty days.

LTCi premiums are calculated based on your health and the age at which you apply.  Applying at a younger age when you are healthier can result in lower premiums and can increase the likelihood that you will be approved for coverage. Applicants are underwritten to determine insurability and rate class. Go HERE to see if you qualify.

The cost of purchasing a policy is based on your age and health and the longer you wait, the more the price increases. It’s important to obtain coverage when you are younger and healthier and more likely to be approved. The time to plan for long-term care is now. Don’t wait!

The underwriting process includes one to three steps depending on the carrier. These vary depending on your age and where you live. These can include, medical records review, telephone interviews and/or a face-to-face assessment.

The process from application submission to when a decision is communicated takes an average of three weeks but may vary if there is a delay in collecting medical records or in conducting the telephone interview or face-to-face assessment.

The first step in facilitating a quick review is to ensure your application is fully completed and accurate and includes information about any existing conditions and medications.

Long-term care (LTC) policies pay for skilled, intermediate or custodial care in a nursing home for a minimum of 24 months.  LTC policies also cover 12 months of lower level care, such as home health care or adult day care.

Nursing home policies can cover either nursing home care or a combination of nursing home care plus custodial care.

yes, some carriers offer rate guarantees where applicable.

Tax laws at both the federal and state levels may provide incentives for individuals and businesses to purchase qualified long-term care insurance policies. Your policies must be considered “qualified” and may be eligible for favorable tax treatment, where available. Also, policy benefits received by the policyholder at the time of claim are received tax-free.1

1 Neither Alabama Long Term Care, its subsidiaries, nor any of its Agents are in the business of offering tax, legal or accounting advice and nothing contained herein is, or should be construed as, legal, tax, or accounting advice. Clients should always consult with their independent professional advisors to seek advice on the applicability of this information to their particular circumstances.

yes, some carriers offer discounts for partners and spouses.  Some of these discounts are significant. conditions and availability vary by state.