Long-Term Care Insurance

According to the Long Term Care Insurance National Advisory Center, by the year 2030, 1 in 5 Americans will be over the age of 65. However, although we may be living longer, the effects of aging and chronic disease on the body remain an issue and for us, the longest-living population in history, the need for long-term care will be greater than ever.

Long-term care insurance helps pay for services above and beyond what regular medical insurance and Medicare will pay for, in terms of care expenses, such as visiting nursing and in-home care, assisted living or rehabilitation/nursing home facilities. In some cases, the state/federal Medicaid program will pay for some long-term care needs, but only if the person falls below certain financial guidelines.

Frankly, buying long-term care insurance can be expensive. According to the AARP, someone in good health, 65 or older, can expect to pay a few thousand dollars annually, above the cost of any other medical insurance they may have, for a policy. Nevertheless, considering the potential out-of-pocket costs of services covered by a long-term care policy, it may be money well spent.

Long-term care provides money toward home care or assisted living should you need them in the future.

There are numerous plans available, offered by many providers. Some policies cover time at a nursing home only, others for in-home care, and still others, for a combination of options that can include nursing home facilities, assisted living, in-home care, or a stipend for a family member to become a caregiver to you. Like regular health insurance, the daily/monthly benefits, benefit period, waiting periods and exclusions vary. You can always count on me to seek out the best policy to give you peace of mind when the time comes for you to choose a policy.

Long-term policies pay out in two ways: indemnity, which is recommended, or reimbursement. Indemnity policies usually pay you your maximum benefit in a lump sum to spend on your care as needed. Indemnity policies offer more freedom choosing the type and location of the care you receive but usually cost more as you pay the monthly premiums. Reimbursement plans work exactly how they sound--they require you to pay for your care and then usually pay benefits directly back to you for covered care.

There are five critical things you need to know in designing your long-term care policy. They are as follows:

Facility services maximum daily benefit (FMDB):

This is the maximum amount of money reimbursed for care in a facility each day you are on claim following the waiting period. You may choose an amount between $50 and $400. Facilities covered by the policy include nursing facilities and assisted care living facilities.

Benefit period:

The benefit period is the length of time you would like benefits to be paid. You may choose one of the following benefit periods: 2 years, 3 years, 5 years, or 7 years.

The policy lifetime maximum or “benefit pool” is the facility services maximum daily  benefit multiplied by the benefit period you select. This figure represents your total   policy  value, or total pool of benefit dollars. For example, $300 a day multiplied by a five-year benefit period would equal $547,500 (5 years x 365 days x $300).

Home and community-based care (HMDB) maximum daily benefit:

Expressed as a percentage of your daily benefit, this valuable feature provides you with the assistance you need to remain in the comfort of your own home or residence. For example, a 50% daily benefit amount for home and community-based care on a $200 maximum daily benefit would equal $100 per day. You can choose from 50%, 80%, and 100% of your daily benefit.

The Waiting Period:

The waiting period is the number of days of covered and paid services you must receive before benefits will become payable. Think of this as the deductible for your policy. You may choose 90, 180, or 365 days. For example, if you choose a 90-day waiting period, you would have to pay for 90 days of eligible long-term care services before you would receive benefits from your policy.

Inflation protection:

A tool that helps your policy retain or even grow its value over time to keep pace with the cost of care.

The extras and customization.

At First Financial Security, we offer a variety of policy riders and inflation-protection options (at additional cost) so you can completely customize your policy to suit your needs. I can help you understand what’s best for you. As you design your policy, it’s important to keep in mind that we have options for every budget. Some coverage can go a long way.

Qualifying for benefits

You are eligible to receive benefits once a licensed healthcare professional certifies that you need substantial assistance with two or more of the activities of daily living, which are dressing, eating, continence, toileting, getting in and out of a bed or chair (transferring), and bathing, or you require substantial supervision due to severe cognitive impairment. Frankly, you along with your healthcare professional will know when it is time to use your benefits.

The claims process starts the moment you, a family member, or your Agent contacts Allstate to let us know you need to use your policy benefits. For any questions or concerns, please feel free to contact me or just drop by the office to further discuss how I can provide you and your family financial peace of mind.

Roderick Johnson, Trusted Advisor

First Financial Security

6710 Oxon Hill Rd. Ste. 210

Oxon Hill, Maryland 20745

P (202) 832-1417 Ext. 1

 F (347) 710-9413

C (240) 997-4024