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Everything you've always wanted to know about Long Term Care Insurance...
But were afraid to ask...

What is Long Term Care?

Long Term Care is the daily care required due to chronic illness or disability. It's an ever changing array of services aimed at helping people compensate for limitations in their ability to live independently. It can range from assistance with household chores to highly skilled medical care. It can be delivered in your home, in an assisted living facility, in an adult day care center, in a nursing home, or in a variety of other settings.

What is Long Term Care Insurance?

Long Term Care Insurance is a form of insurance that transfers the risk from you to the insurance company in exchange for paying a premium. It funds many levels of care should you become unable to care for yourself.

Why is Long Term Care Insurance so important?

Consider these facts:
The cost of nursing home care in New England today averages between $200-$250/day!

Medicare doesn't pay for Long Term Care!

Due to technology and medical breakthroughs, people are living longer today than at any other time in our history. The fastest growing segment of our population is over age 65!

Women, who were once the primary caregivers to family members, are now in the work force because families depend upon two incomes!

76 million Baby Boomers will start to turn 65 within the next 10 years!
Is Long Term Care Insurance right for everyone?

No, not everyone is a good candidate for Long Term Care Insurance. If you have limited assets, then Medicaid and community based programs may be better suited to meet your needs. If you have assets to protect, then Long Term Care Insurance is probably the best option for you to pursue. My rule of thumb is that you should be able to comfortably fit this item into your budget. If purchasing Long Term Care Insurance is going to take away your only vacation for the year, then this purchase may not be right for you!

Long Term Care Insurance can keep many families from being financially devastated if a long term illness takes place that requires care. Long Term Care Insurance allows you the freedom of choice so that you won't have to rely upon the government for your Long Term Care. Long Term Care Insurance is a sensible and cost effective way for single people or couples without children to protect themselves so that they can remain independent and not feel like a burden to their family members. Long Term Care Insurance is one of the most nurturing gifts that parents can give to themselves while also sharing a loving gift with their children.

What do I really need to buy?

If you were my client, I would I tell you that there are really only 4 important pieces to the Long Term Care Insurance puzzle.

The first piece of the puzzle would be to select an adequate $/day. It makes sense to investigate the cost of specific nursing homes in your area as well as specific assisting living facilities in your area. This will give you a baseline as to the cost of care if you are planning to continue to live where you presently reside.

The second piece of the puzzle would be to select an elimination period that makes sense for you from an investment standpoint. Think of this as a deductible and understand that whatever you select as your elimination period is the maximum out of pocket that you might have to pay before you can start to receive benefits from your policy. Most insurance companies have a variety of options available and you can select from a 0 to a 365 day elimination period.

The third piece of the puzzle is inflation. Depending upon what age you are will determine what kind of inflation would be most appropriate for you. The major choices are compound, simple, and none.

The fourth and last piece of the puzzle is the feature that I refer to as the crystal ball piece!! This feature is the benefit duration or the period of time that the policy will pay benefits to you from the day you start your claim. You can pick from 2 years to Lifetime, with almost every option in between. There is no right or wrong amount of time. Many times the selection is based upon the budget that the person or couple have to work within. Many times the selection is based upon a genetic predisposition towards a particular health condition. For instance, a client who had a mother who died from Parkinson's and a father who died from Alzheimer's is much more inclined to buy a Lifetime benefit duration than a client whose parents both lived to be 97 with no major health concerns.

What don't I really need to buy?

As if all of that isn't enough to make your head spin, then the insurance companies offer you the hit parade of bells and whistles! This is clearly where all that glitters isn't gold! Whenever a policy feature sounds too good to be true, chances are that it may very well be! My rule of thumb is to tell clients to think twice about paying extra money for coverages such as: Survivorship, Restoration of Benefits, Return of Premium on Death, and Nonforfeiture. Some of these features can add 4-5% to the cost of the policy and others can add upwards of 15% to the cost of the policy.

But what if I'm not in the greatest health?

Don't assume that because you had cancer or bypass surgery; or have depression or diabetes; that you will be declined for Long Term Care Insurance. Some companies have a specialty in underwriting diabetics while other companies have a specialty in underwriting people who have had heart related concerns, while other companies have a specialty in underwriting the perfectly healthy client who takes no medications and has no health problems. The list of declinable conditions is a whole lot smaller than the list of acceptable conditions! Long Term Care Insurance companies aren't just concerned with the particular health condition that you had or may have, but are equally concerned with how well you manage that health condition with medication and lifestyle. Remember this rule of thumb: all insurance companies, regardless of the kind of insurance, want to write good business!

Is now a good time to buy?

We are extremely fortunate today that there are many excellent Long Term Care Insurance policies being marketed by many financially strong reliable insurance companies. The majority of the products being sold today are comprehensive and reasonably priced.

Who sells Long Term Care Insurance?

Lately, it seems that just about everybody does!! Colleges are selling it to their employees; banks are selling it to their depositors; associations are selling it to their members. Who isn't selling it??!! I would suggest that you work with a Long Term Care Insurance specialist who represents more than one insurance company. When it comes to Long Term Care Insurance, once size doesn't fit all! Each client deserves to be custom fitted with the right company for his/her own financial and medical profile. Long Term Care Insurance specialists generally don't sell any other kind of insurance. There's a whole lot to consider when you start to explore Long Term Care Insurance. It may seem overwhelming at first and that there's just too much information for the average person to understand. Long Term Care Insurance specialists demystify long term care insurance so that it can be decoded into layman's terms.

Which other professionals can I talk to?

I always suggest to my clients that they talk with their financial planner and their estate planning attorney for her/his opinion. These professionals are encouraging more and more of their clients to investigate Long Term Care Insurance to round out their financial and estate plans. They understand the product, how it works, and the important role that a properly constructed Long Term Care Insurance policy can fill. They know if long term care insurance would be an appropriate recommendation for your particular situation. In addition, if you own a business, you may want to talk with your accountant. Depending upon how your business is structured, you may be eligible for some significant expense portability by purchasing Long Term Care Insurance.

What can I read?

Call the Division of Insurance @ 617-521-7777 and ask them to send you a copy of "Long Term Care Financing: A Massachusetts Guide". It's free and it will set the stage for you to start your journey into LTCland. Also, if you call the Executive Office of Elder Affairs @ 1-800-243-4636 and listen for the correct prompt, they've got a number of free publications including "Assisted Living in Massachusetts: A Consumer's Guide" and "Directory of Long Term Care Facilities in Massachusetts."

I'm sure that you will have many more questions as you embark on your journey into and through LTCland. We don't offer free miles, but if I can be of any assistance to you, please don't hesitate to contact me.

Tobe Gerard, CLTC, MBA, has been in the insurance business for over 25 years. She owns her own insurance agency and represents 10 Long Term Care Insurance companies because of her strong belief that "one size doesn't fit all!" She can be reached by phone: 508-653-8110 or by e-mail: or by mail to: Tobe Gerard, Insuring Your Golden Years, P.O. Box 813, Natick, MA 01760


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