Vincent F. Gauci - VFG Associates,LLC

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  • FAQ

    Long Term Care


    What is Long Term Care Insurance?

    Long term care insurance is a type of coverage available for people who potentially may require long term care. There are many types of long term care insurance (LTCi) available but as a standard it covers things that health insurance does not and it can also protect your assets. When you purchase an LTCi policy, it takes any possible burden off of your children to have to provide care for you. These policies typically cover such things as nursing homes and adult day care but can also cover things such as home care and assisted living. If you have an LTCi policy, the benefitswill be triggered when you begin to need help with activities of daily living or have a severe cognitive impairment.

    Doesn’t the government take care of Long Term Care?

    Generally, Medicare doesn’t pay for long-term care. Medicare pays only for medically necessary skilled nursing facility or home health care. However, you must meet certain conditions for Medicare to pay for these types of care. Most long-term care is to assist people with support services such as activities of daily living like dressing, bathing, and using the bathroom. Medicare doesn’t pay for this type of care called “custodial care”.

    Financial eligibility for Medicaid nursing home and community waivers requires the recipient to have less than $2,000 in resources. ($3,000 if a couple needs care) Resources are defined as any asset that can be utilized to produce income or cash payments. There are numerous rules as well as gifting look back provisions that define what a resource is and is not. Some important assets that aren’t required to be counted as resources are a personal residence, a life insurance policy with less than $1,500 cash value, a prepaid funeral and burial plan and a car (if necessary for transportation and care). If the recipient is married, the spouse at home keeps the residence and a vehicle worth any value.

    Won’t my Health Insurance cover my Long Term Care?

    This is a common misconception.  In fact, most health care insurance policies do not cover long-term care costs.

    How much does Long Term Care Insurance Cost?

    When buying insurance, the younger the consumer, the lower the annual premiums. Today, according to Slome’s association, a 55-year-old couple in generally good health can expect to pay $2,675 a year for $338,000 of benefits; that figure would grow to $800,000 by the time they reach 80 if the policy contained a 3 percent annual compounded escalation clause. If they are 65, however, that same policy would cost $4,660 a year and grow to only $527,000 in coverage when they are 80.

    Can I wait to buy Long Term Care Insurance?

    Another incentive to start young with long-term care is the greater likelihood you’ll qualify.  Fewer than 1 in 10 of those younger than 50 is turned down for long-term care coverage, compared to nearly 25% of those 60 to 69 who are rejected and 45% of those ages 70 to 79, according to the American Association of Long-Term Care Insurance.
    “The requirements get much more stringent when you get older,” says Edward Graves, associate professor of insurance at The American College in Bryn Mawr, Pa. “Any time after 60, (insurers) start tightening the window. The longer you procrastinate, the harder it is to get the coverage.

    I don’t have any assets to protect, why do I need Long Term Care Insurance?

    In addition to protecting assets, long-term care insurance affords more choice about whether you move into a nursing home or assisted living facility or stay at home. Long-term care policies can cover home care, while Medicaid generally does not.

    What happens if I buy a Long Term Care Policy and never use it?

    Many of the top long term care insurance companies now offer a Return of Premium feature built-in the policy or available as a rider, so you can have your premiums returned to a named beneficiary if you don’t use the benefits.  This is great especially if you are younger and paying premiums for many years prior to retiring, as many of these built-in return of premium features are in effect up until age 65.  Then after age 65 the return of premium feature is turned off or reduced, primarily because at that age and older the risk for needing care is so very high.

    Why do I need Long Term Care Insurance if I have a spouse to take care of me?

    Caring for a sick or disabled elderly relative exacts a toll — physical, emotional, financial — on any family member, but being a spousal caregiver brings particular challenges. “Spouses are older and dealing with their own age-related health limitations,” says Steven H. Zarit, a Pennsylvania State University gerontologist. The tasks they shoulder have grown more demanding: Family caregivers now administer arsenals of medications and undertake procedures, from wound care to dialysis, that were once the province of medical professionals.

    Why do I need Long Term Care Insurance if my children said I can move in with them?

    The National Alliance for Caregiving (NAC) estimates that $659,000 per person is lonsi in pensions, Social Security Benefits and wages as adult children – mainly women – take time off from work to care for their parents.

    The physical toll can be severe too.  Caregivers report having one or more chronic conditions, such as high blood pressure, at nearly twice the rate of all Americans.  Of those who say their health has worsened because of caregiving, 91% report depression.

    What if I can’t afford the coverage I need?

    Customers can pay a less expensive premium by not insuring the entire risk. Someone with a pension might consider buying insurance that pays $180 a day, instead of $220, making it much less expensive. “It can be presented wrong,” Gordon says. “If someone is selling them everything but the kitchen sink, it can be very, very expensive.” Many agents suggest, though, that customers under 70 get a policy that adjusts for inflation at 5 percent compounded. Don’t just shop price, however, agents say. Make sure you are dealing with an established company and a knowledgeable LTC advisor.

    What is the difference between levels of care?

    In-home care, which makes it possible for people to live in their own homes or to return to their homes by helping them complete household tasks that they can’t manage alone. Homemaker service aides may clean houses, cook meals, or run errands.  Adult day care, which offers social and therapeutic activities while you continue to live at home.  Assisted living facilities, which let you maintain much of your independence while providing on-site support for activities of daily living.  Nursing homes will give you more skilled and intensive care associated with supervision, medication, therapies, and rehabilitation.;jsessionid=AD2B5FDE08DE03238B5292E44DD2D529.longtermcareb?state=MI

    What is the difference between “hands-on” and “stand-by” assistance?

    Hands-On Assistance – The physical assistance of another person without which you would be unable to perform one of the Activities of Daily Living. Some insurance carriers define the inability to perform an ADL without hands-on assistance as a trigger for policy benefits. This is a more stringent measure than merely requiring “stand-by” assistance. 
    Stand-By Assistance –The presence of another person within arm’s reach required to prevent injury during the performance of an ADL. For example, if you need somebody standing by to catch you in case you fall getting in and out of the bath. This is a lesser requirement for triggering of policy benefits than the requirement for hands-on assistance.

    What are Activities of Daily Living?

    Everyday routines generally involving functional mobility and personal care, such as bathing, dressing, toileting, and meal preparation. An inability to perform these renders one dependent on others, resulting in a self-care deficit.

    What triggers my benefits to kick in?

    The most common benefit triggers for long term care insurance are the Activities of Daily Living (ADL): bathing, continence, dressing, eating, toileting and transferring. Policies usually require a person to need assistance with at least two ADLs, sometimes three, for 90 days or more, or have a cognitive impairment.—7-frequently-asked-questions.html

    What is a Care Coordinator?

    A provision most policies have is to provide a care coordinator certified at the state level. If you have a long-term care insurance policy, the care coordinator will know the reputations and costs of the care-giving agencies in your area.

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