Kelly Insurance--Long Term Care Insurance Answers

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Long Term Care Insurance Answers

What is long term care (LTC) insurance and why is it receiving so much attention and publicity today?

Long term care (LTC) insurance provides coverage for the cost of custodial and other types of extended care provided in the insured's home, community, assisted living facility or nursing home. LTC policies provide important protection to the insured because, currently, neither Medicare nor the typical medical expense insurance policy covers custodial-type care. The aging of the U.S. population, coupled with continuing medical advances, will likely lead to significant growth in the demand for custodial and related care. This increased demand, together with costly nursing home stays (now estimated at $52,000 per year in Northern Virginia), will likely create an environment where much publicity and attention remain focused on the need for LTC insurance.

Most long term care (LTC) insurance policies offer coverage of skilled nursing care, intermediate nursing care, custodial care and home care. What are the differences in these levels of care?

Skilled nursing care is the highest level of nursing care and consists of round-the-clock care, ordered by a physician and usually provided by a registered nurse or a licensed practical nurse. Intermediate nursing care is similar to skilled nursing care except that the care is usually not provided round-the-clock. Custodial (or personal) care consists of help in carrying out the activities of daily living (ADLs). Since it does not consist of any medical treatment, custodial care can be delivered by persons who are not medically trained. Home care consists of both medical care and personal services (e.g., cooking and cleaning) provided at the patient's home.

What important factors should be considered when purchasing long term care (LTC) insurance?

Because LTC insurance is still an evolving product, considerable variation exists between LTC products marketed by different insurers. Some of the more important factors to consider are (1) whether the policy is issued on a guaranteed renewable (insurer cannot cancel the policy but can increase the premium) or non-cancelable (insurer cannot cancel the policy or increase the premium) basis; (2) the nature of any pre-existing conditions exclusion; (3) which levels of care are covered (skilled, intermediate and custodial) (4) where care can be received, (e.g., assisted living facility, insured's home, adult day care, skilled nursing facility).

What benefit choices are typically offered by insurers marketing long term care (LTC) products?

Insurers frequently offer prospective insureds: (1) the choice of length of the elimination (waiting) period prior to the commencement of benefits; (2) a choice as to the maximum daily benefit (e.g., $100, $150) that can be purchased; (10) the choice of maximum benefit period (e.g., 2, 5, or 10 years or lifetime); and (11) an inflation protection option. Given the rapid pace of change in product design, other options may be offered in the future.

Can I deduct my long term care (LTC) insurance premiums?

At this time, an individual may be able to deduct premiums on his individual tax returns if certain guidelines are followed and the policy meets certain qualifications. A business owner may be able to deduct premiums under certain conditions. Federal legislation to increase deductibility of premiums is currently under consideration. Various states have passed tax preferential treatment of long term insurance premiums. Check with your tax advisor for specific details.

For a FREE Shoppers Guide to Long Term Care Insurance, please submit the following information:

Name:

Mailing Address:

City, State, Zip Code:

Home Telephone:

These questions and answers are provided for users' general information. Although we make every effort to insure accuracy in the information provided, we cannot make any guarantees as to this accuracy. We urge you to consult your lawyer, accountant or tax advisor for specific legal or tax advice.

Long Term Care Insurance Answers What is long term care (LTC) insurance and why is it receiving so much attention and publicity today? Long term care (LTC) insurance provides coverage for the cost of custodial and other types of extended care provided in the insured's home, community, assisted living facility or nursing home. LTC policies provide important protection to the insured because, currently, neither Medicare nor the typical medical expense insurance policy covers custodial-type care. The aging of the U.S. population, coupled with continuing medical advances, will likely lead to significant growth in the demand for custodial and related care. This increased demand, together with costly nursing home stays (now estimated at $52,000 per year in Northern Virginia), will likely create an environment where much publicity and attention remain focused on the need for LTC insurance. Most long term care (LTC) insurance policies offer coverage of skilled nursing care, intermediate nursing care, custodial care and home care. What are the differences in these levels of care? Skilled nursing care is the highest level of nursing care and consists of round-the-clock care, ordered by a physician and usually provided by a registered nurse or a licensed practical nurse. Intermediate nursing care is similar to skilled nursing care except that the care is usually not provided round-the-clock. Custodial (or personal) care consists of help in carrying out the activities of daily living (ADLs). Since it does not consist of any medical treatment, custodial care can be delivered by persons who are not medically trained. Home care consists of both medical care and personal services (e.g., cooking and cleaning) provided at the patient's home. What important factors should be considered when purchasing long term care (LTC) insurance? Because LTC insurance is still an evolving product, considerable variation exists between LTC products marketed by different insurers. Some of the more important factors to consider are (1) whether the policy is issued on a guaranteed renewable (insurer cannot cancel the policy but can increase the premium) or non-cancelable (insurer cannot cancel the policy or increase the premium) basis; (2) the nature of any pre-existing conditions exclusion; (3) which levels of care are covered (skilled, intermediate and custodial) (4) where care can be received, (e.g., assisted living facility, insured's home, adult day care, skilled nursing facility). What benefit choices are typically offered by insurers marketing long term care (LTC) products? Insurers frequently offer prospective insureds: (1) the choice of length of the elimination (waiting) period prior to the commencement of benefits; (2) a choice as to the maximum daily benefit (e.g., $100, $150) that can be purchased; (10) the choice of maximum benefit period (e.g., 2, 5, or 10 years or lifetime); and (11) an inflation protection option. Given the rapid pace of change in product design, other options may be offered in the future. Can I deduct my long term care (LTC) insurance premiums? At this time, an individual may be able to deduct premiums on his individual tax returns if certain guidelines are followed and the policy meets certain qualifications. A business owner may be able to deduct premiums under certain conditions. Federal legislation to increase deductibility of premiums is currently under consideration. Various states have passed tax preferential treatment of long term insurance premiums. Check with your tax advisor for specific details. For a FREE Shoppers Guide to Long Term Care Insurance, please submit the following information: Name: Mailing Address: City, State, Zip Code: Home Telephone: These questions and answers are provided for users' general information. Although we make every effort to insure accuracy in the information provided, we cannot make any guarantees as to this accuracy. We urge you to consult your lawyer, accountant or tax advisor for specific legal or tax advice.