Mainly because – apart from the emotional and physical toll that being unable to care for yourself takes – the cost of care can be financially ruinous! Care can cost $100-300 per day (about $40,000 - $110,000 per year) or more, and the need can last many years. And no one else is going to pay that cost. 

Only the extremely wealthy, with many millions in liquid assets, can consider not owning insurance that will cover
these costs. Interestingly enough, many very wealthy people own LTC insurance because they have other plans for
their money and see the benefit of conveying the risk onto an insurance company.

Not really. Medical insurance covers the costs associated with improving your health. It is about “making you better”.  LTC insurance instead is concerned with your chronic (in)ability to care for yourself day-to-day. In fact, a hospital
stay isn’t even required to collect LTC benefits under most plans. With a chronic condition, care may be needed for
several hours a day, perhaps 24 hours a day, and can go on for months or years, sometimes many years. 

At $15 an hour for 8 hours a day, 2 years of care costs almost $90,000. 
Two shifts (16 hour a day coverage) for 4 years, would be over $360,000, over and above your other costs of
healthcare and living. 

The cost of care can be staggering!

Medicare covers very little of it. Since 1965, Medicare has been the Federal insurance program for people 65 and
older.  Medicare Part A covers hospital charges. Part B covers patient services.
 
Medicare was not designed to cover long term care insurance.
Medicare pays for some home health care and even less of skilled nursing facilities, and only if you were in a hospital.  Medicare only pays for 20 days of recuperation and a small amount for days 21-100.  After day 100, no benefits are provided, and you are expected to finance your own care.

Medicaid could take care of you if you’re very poor. Medicaid is a federal-state health insurance program, a welfare program for the poor, which can provide nursing home care. You won’t have flexibility in determining where you will reside (since someone else pays the bill).  You will not be able to stay in your own home.  You would have to go to
a nursing home convenient to the government.
 
In many states you must become eligible by spending down to $2,000 in total assets, excluding an allowance for
the home (if a spouse resides there or a return home after care is expected). In most states, the nursing homes are required to keep only 10% of their beds for nursing home patients on Medicaid. The waiting lists are long (frequently
one to two years!).  Visiting friends and family will be upset if you are housed at a facility of the state’s choosing at
a considerable distance from them. Is this what you would want for your loved ones?

Nevertheless, unfortunately, certain advisers have counseled people to “impoverish” themselves to “qualify” for
Medicaid.  This has sometimes resulted in families secretly transferring and hiding assets. 

“Claiming poverty” improperly is a form of welfare fraud.

* Those who want to stay independent of the support of others or government aid, 
* Those who want to direct and have control over their own care, and 
* Those who want to pass significant assets on to their children or charity.

We are living much longer. Conditions that used us to kill now often only debilitate.
You are now less likely than years ago to die from a stroke, but more likely to endure the aftermath of a stroke for
a longer period. And, as we live longer, we become exposed to more of these maladies. 

Family members are more widely disbursed than in the past (when your parents lived next door and the kids and grandchildren the next town over), which means it is harder than before to count on their help. 

And would you want to? 
Do you want your loved ones to struggle with your bathing needs and toileting needs every day?

It’s not about lunch. The sandwich generation is a phrase social scientists use to describe the increasing number
of people who care for both their children and their parents, and are sandwiched between the demands.
 
Children want their parents to demonstrate their love by spending time with them, and if this is diluted by the need
to spend significant time with parents who cannot care for themselves, they are sandwiched between the demands.
Properly planned in advance, this squeeze can be largely overcome with Long Term Care insurance. 

It covers the cost of care should your parent be unable to take care of himself or herself either in your home or their home.  By being reimbursed for the cost of care, the parent need not demonstrate devotion beyond all reason by spending endless time providing free mundane care, and instead can spend quality time with the parent, their
children, and hopefully, some time for themselves, too.

Money doesn’t buy love, but it can buy flexibility.

LTC insurance reimburses you for the costs you pay for care, and thus enables you to affordably have the care you
need to function. You will qualify for reimbursement if you are unable to perform Activities of Daily Living or if you have
a cognitive disorder, as specified in your policy.

In general, LTC benefits are payable in a variety of care settings, including your own home, assisted living facilities,
and licensed nursing homes. We’ll find a policy that covers the specifics to address your LTC needs. 

My skill is in listening to your needs, and reviewing your options so that we can intelligently maximize the potential benefits from an LTC policy. We’ll discuss how much daily benefit you might need, how inflation can impact your
plans, how long you would like to have the coverage, your elimination period, qualifying for coverage, and assessing
how an LTC policy fits in with your other assets to protect you.

This is another way I provide value to you!

There are many criteria for shopping for a LTC policy. I’ll provide you with industry-standard buying guides, discuss
the language of the contract, and provide a great deal of other useful information. We’ll explore your needs and how
they are best addressed.  We’ll look at benefits, cost, limits of coverage, exclusions, and the premium history and financial stability of the carrier, etc. 

In addition, if you have certain health challenges, we’ll be sure to apply only for coverage that the best chance of
being approved by the underwriters.

Activities of Daily Living (ADLs) are a standardized, relatively objective way of measuring and describing the things
we all do every day. These activities include bathing, eating, dressing, continence, toileting, and transferring (getting
up and down from a chair or bed). Most insurance companies decide if you are eligible for LTC benefits or to determine the degree of your functional capacity by measuring your ability to perform the ADLs.

Typically a policy pays benefits when you can’t do two (usually) of the six ADLs without standby or hands-on assistance, although some policies only consider someone qualified for benefits if they require hands-on assistance (standby assistance would not be enough).  Most plans also provide benefits when a person has a severe cognitive disorder, like Alzheimer’s disease.

Paying your own premiums may prevent fights between siblings. 
If you cannot pay, it’s not uncommon for well-off children to pay LTC premiums on their parents. 

We can discuss tax deductibility, and how to avoid creating family conflicts.

As a rule, yes, unless you are buying the coverage at a later point in your life, say age 80 or so. 
For anyone buying the coverage in their 40s, 50s or 60s, there may be a long period between buying the policy
and making a claim.

Without it your coverage will likely be inadequate when you need it. Imagine having bought LTC insurance in 1963,
when $25 per day reasonably covered a day’s care. If you needed care for many years, would $25 per day still have provided adequate coverage in the 1990s?

Most policies offer an option to increase the available benefit by 5% each year, and grow your benefit while you are receiving claims. If yours is a long-term claim, this feature is unmatched in its’ ability to keep you up with inflation
the entire time. Of course, the feature costs money. For younger LTC insurance buyers, the inflation rider doubles
the cost  of the coverage, but without it, the policy is not meaningful when you need it.

Even though your benefit dollars increase every year, your premium is intended to remain the same.
Most buyers need inflation protection, in the form of a rider, either compound, simple or “COLA”.

It provides evermore coverage as you get older, because the available benefit increases 5% over last years’ benefit.
It compounds. Simple 5% inflation rider just repeats the initial calculation of 5% and add that same amount each year.

Compound inflation protection also costs more.
Both automatically increase your protection each year, but particularly for younger buyers, compound inflation
grows your available benefit much higher than simple inflation:

One possible reason premiums seem lower is the way group plans provide inflation protection to you.
Unlike an individual policy where you know - from the outset - what your inflation benefits will be each year
(either 5% compound inflation or 5% simple inflation), a typical group insurance plan allows you - every three
years - to buy additional benefits attributable to inflation (at your attained age). 
This is called a COLA (cost of living adjustment) inflation protection.

If real inflation goes up 11% over three years, COLA gives you the option to buy 11% additional coverage,
but at your new, higher age! 

That eventually becomes a very expensive way to keep your coverage adequate, as you will be spending
evermore dollars to keep up with inflation increases.

Actually, there is something much worse.

COLA inflation oftentimes includes an innocuous question on the application you fill out every three years
to buy-up the additional insurance:  “Are you receiving any Long Term Care insurance claim benefits?” 
It mentions that if you are receiving benefits, then no further inflation increases are offered.

Picture this scenario. After many years at BigCo, you “take the package” and retire at age 58.
One of your BigCo benefits is Long Term Care insurance, which provided $120 per day benefit when you retired.  Through COLA, it grew to $140 per day when you turned 61. Unfortunately, you have a stroke at age 62.
You survive, but have residual, chronic problems, and file a claim for LTC for which you receive benefits of $140 per day.  When you turn 64 (three years after your last increase at 61), you answer the “are you receiving benefits”
question yes, and that’s that. Your benefits will never increase again, because you are “on claim”! 
Even if you need care for another 25 or 30 years.

Your benefits will become evermore inadequate to cover your cost of care, and you are no longer in a position,
health-wise, to buy a new policy. 

The group carrier can charge less, because when you most need the coverage to grow, it doesn’t.
They reduced their risk at your detriment.

A shared benefit provides a single “pot of money” for LTC coverage, which you and your spouse draw from over
your lives. It is a way to make the total premium lower.

If the initial pot has $400,000 and the husband uses $250,000 and then dies, however, the wife would have a
maximum of $150,000 left of coverage to use.

If both ultimately need extensive coverage, then your LTC plan could be inadequate, although some carriers offer
a rider to restore the full original benefit.

There are many ways to stretch your premium budget. 

Let’s discuss them.

Most policies today include Adult Day Care. 

In an effort to allow each individual to remain as independent as possible, Adult Day Care is an alternative to
assisted living or a nursing home. Adults with physical and mental handicaps can benefit for a long time in such
an environment, and it gives their primary caregivers a respite. 

Adult Day Care Services include structured programs, lunch, outings, health and rehabilitation services, family
support and transportation.

Most claim dollars are being paid for informal care, mainly at home.

Surveys indicate that most (between 65% to 80%) claim dollars paid are not being paid to nursing homes.

They are paid to individuals at their own homes, or living at home and using Adult Day Care.
Most people don’t want to go to a facility, and with LTC insurance, they don’t need to.

Of course, if they ever do need to move to a facility, LTC insurance funds the cost of that as well.

An Attending Physician’s Statement is your medical report from your doctor, including results from your last few
office visits, and any blood, urine, lab and EKG reports. 

This statement is necessary for most applications for LTC insurance.
The insurance company pays your Doctor’s office to copy whatever is requested from your file.
This process usually takes a few weeks.
A call from the patient to the Doctor can speed up this process.

Remember – these are your records!

Studies have shown that two insureds provide mutual support.A spouse or other life companion can also help
a care coordinator in providing home health care. This may keep the person home longer and/or speed recovery and rehabilitation. 

The assistance a spouse provides decreases the expense of home health care.
Hence, they provide a premium discount.

Of all the discomfort in addressing the need for Long Term Care, the prospect of going to a nursing home was the
most daunting.

LTC insurance’s forerunner was Nursing Home Insurance, and it was widely unpopular.
The best products in the latest generation of LTC insurance successfully addresses the concern for staying in
one’s own home with benefits that allow you to receive care at home. They provide for occupational, physical, respiratory, and speech therapies or nursing care. Also included are services from a social worker, home health
aide, and homemaking services. This is automatically included at no extra cost with most, but not all policies.

This is a critical topic for us to discuss!

Usually not.

Most carriers have the same rates for men and women.
The rationale is that even though women tend to live about five years longer than men, they also tend to have
debilitating diseases which cause a higher need for nursing home care.

Some carriers waive remaining premiums for the surviving spouse if premiums have been paid for 10 years and
there have been no benefits paid (not approved in all states).

This waiver is a low-cost option I recommend, and some carriers even include it free in their base premium.

As a rule, no.

Non-Forfeiture part or all of the premiums to you, or provides for a smaller paid-up policy if you cancel or lapse
your policy. Depending on your state of residence, this feature can add another 10 to 100% to the cost of the
premium. 

We discuss your finances – your ongoing ability to afford the premiums – and presume you intend to pay for
it for the rest of your life.  In short, a plan for success.

Why spend extra money on the chance that you’ll discontinue the coverage?
Or pay extra for your survivors to get the premiums refunded?

Let’s discuss which features fit your needs and budget.

Yes. Most companies will allow you to apply until age 80.

However, the costs gets higher for each year you wait and the underwriting becomes more difficult.
To qualify for the coverage you will need to provide your doctors’ names, phone number, date last seen and why,
and a list of current medications.

Older applicants are typically required to have either a face-to-face, or a phone interview.
This interview consists of an approximately 60-minute review of your medical history, your ability to care for yourself
and an evaluation of your cognitive abilities. 

Buying a policy at an earlier age can avoid this.

The Health Insurance Portability and Accountability Act, provided tax incentives for the purchase of “qualified” plans.  Most plans are tax-qualified, but we should certainly discuss the significance of tax-qualified versus non-tax-qualified policies. 

Individuals can deduct a portion of LTC premiums as medical expenses, based on their age and taxable income.
There are special tax benefits for employers, as well, and if you own a business, we should certainly discuss this.