Long Term Care Insurance Benefits | Insurance Planning Considerations

Understanding Long-Term Care Insurance

Published on by Beth Germann in Wealth Management

Understanding Long-Term Care Insurance

It is a widely accepted fact that medical costs have been on the rise for some time, and the concern for the future burden of these costs is a valid one. As individuals live longer, many of those years in retirement, there is a stronger likelihood that some long-term care will be required.  The costs of the facilities that provide such care are extreme and generally not covered by HMOs, Medicare, and Medigap.  To protect your assets from these costs, long-term care insurance (LTCI) is a type of policy strongly worth consideration. Long-term care expenses extend beyond retirement home expenditures. In fact, people are much more likely to experience long-term care in the form of “in-home care” or “rehabilitation” costs.

LTCI can be expensive – because of the unprecedented increase in the overall expenses covered, many policies that were available 20 or more years ago can no longer be offered.  And even though you may never need long-term care, the risk to your accumulated wealth if care were needed may outweigh the cost.  You should consider a policy if:

  • You have significant assets that you want protected
  • You can afford the premium cost
  • You are between the ages of 40 and 84
  • You are in good health and deemed insurable

Like most insurance policies, with LTCI you pay a premium and when a need is identified, benefits are paid out to cover the costs.  Policies can vary concerning the amount of time benefits will be paid, the amounts paid, and waiting periods.  Benefits are triggered when the insured is unable to perform certain activities of daily living (ADLs).  These include eating, bathing, dressing and continence.  Other tests may include cognitive abilities.

There are different types of policies and some key factors should influence your decision on a policy and the company from whom it is purchased.  Among others, some of these factors to be considered when comparing include:

  • The insurance company should be well-rated and financially stable
  • Length of the waiting period
  • Daily benefit coverage
  • Premium increases and renewability
  • Duration of benefits
  • Return of premiums

Although the current payout of the acquisition of LTCI is not determinable, the peace of mind in attaining coverage may be worth the expense.  Also, the premium cost is based on your age when you initially purchase a policy.  Building this coverage early into your long-term plan may be a decision you are very pleased with should you need the care covered by the policy.

By understanding long-term care insurance, you have the opportunity to prepare for the future if you or a loved one may need personal care. If you have any questions about long-term care insurance, call us at 513-241-8313 or click here to contact us. We look forward to hearing from you.


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