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WHY LONG TERM CARE INSURANCE? Protecting Access: As Baby Boomers continue to age, it is expected that demand for long term care services will soar. At the same time, federal and state governments are expected to continue backing away from the massive responsibility of paying for the health care needs of the elderly. Without a doubt, it is the people who plan today that will have the best access to the care they need tomorrow. If the idea of dwindling life savings and selling off some of your family’s assets to finance long term care frightens you - then asset protection is a third good reason to consider long term care insurance. Some people avoid taking responsibility for paying for their care now by divesting or giving away their assets to their children prior to needing long term care so they can qualify for welfare support. This can be a painful process for loved ones and is a gamble at best since laws governing divesture are expected to get tighter as lawmakers search for ways to control rising health care costs. Protecting Choice: People who rely on Medicare, Medicaid or relatives to fund the cost of their care often face very limited choices when it comes to selecting care. Their range of choices is determined by either what their personal or family budgets can afford or whatever public services for which they are able to qualify. By planning in advance, consumers can ensure their access to all types of long term care services available - and preserve their ability to make choices. Can I Afford Long Term Care Insurance? The cost of long term care insurance policies vary according to many factors such as the age of the policy buyer and the conditions of coverage. Many excellent policies are available at premium rates that generally range between $800 and $2500 per year with younger buyers (age 50-60) paying lower premiums and older buyers (65 to 80+) paying more. Each person needs to evaluate their financial situation and determine if long term care insurance is a good value to protect against the potential catastrophic cost of long term care. What to Look for in a Long Term Care Policy A good way to begin is to review general information on Long Term Care Insurance so you will be familiar with the terms and concepts. The publication "A Shopper’s Guide to Long Term Care Insurance" provides an excellent overview. It is available from the ND Insurance Department. Call 1-800-247-0560 to request a copy. Agents should also be able to provide you with a copy of this publication. American Health Care Association / National Center for Assisted Living also publishes a consumers guide to understanding long term care insurance. A free guide can be obtained by calling 1-800-321-0343. There are a number of coverage issues you will need to consider before making your decision. Scope of Services Covered: Products available today may cover care in a variety of long term care settings including home care, assisted living and skilled nursing. You will need to decide if you want a broader range of options or if your need for insurance coverage focuses on only one type. Be certain you understand the "benefit triggers" in the policy. Benefit triggers are the conditions you must meet before the policy will pay. The most common benefit triggers are inability to perform a certain number of activities of daily living or cognitive impairment. Daily Benefit Amount: This is the amount the policy will pay per day for care. Consider the average cost of care per day in your area and decide how much you want covered by insurance and how much you think you can pay out of pocket. Policies typically cover expenses of about $100 per day but policies can be tailored to cover greater or lesser amounts. Benefit Period: This is the length of stay your policy will cover. Lifetime coverage is available, although many people choose coverage periods between 2 and 5 years, since nursing home stays are rarely longer than this period. Deductible/Elimination Period: This is the length of time you must pay for care yourself before the policy kicks in. The longer the deductible period - the lower your premiums. Inflation Protection: It is important to consider inflation riders with your policy - especially if you are a younger buyer. The average cost of nursing facility care in North Dakota is $127.05 per day for year 2002 and increasing, on average 5% annually. The cost of basic care is $49.46 per day and increases about 3% annually. Guaranteed Renewable: Make sure any policy you buy is guaranteed renewable - meaning your policy can’t be canceled for any reason other than non-payment of premiums. With the help of a qualified agent, comparison shop among policies. Many offer unique incentives for buying their product such as discounts if both spouses buy policies and lapse protection to keep your policy from being automatically canceled if you accidentally forget to pay a premium. For additional assistance with long term care insurance questions consumers may contact the ND Senior Health Insurance Counseling Program at the ND Insurance Department, 1-800-247-0560. Trained counselors with no connection to any insurance company or product are available in several communities across the state. They can help you understand, review, or compare policies. Their services are free and confidential. The ND Insurance Department can also:
Call the 800 number listed above. Copyright © 2003 North Dakota Long Term Care
Association. All rights reserved. |