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What is Long Term Care Insurance?

What is Long Term Care Insurance?

What is Long Term Care Insurance?

What Is Long Term Care Insurance

Long Term Care Insurance Polices provide cash to cover the cost of your care when you cannot take care of yourself.

At some point, you may need help to get through each day. Hopefully, you have family and friends to help you, but even they can only help you to a point.

Many people find maintaining their independence and dignity an important value. Consequently, these people find Long Term Care (LTC) Insurance is an important part of their financial planning.

Defining Your Needs

You need to start thinking now about how you will plan for your own care down the road. “Long-Term Care” as a plan has many parts including:

  • Where you will live
  • What services you will need
  • What people you can depend on
  • How you will pay for everything
  • What legal considerations you need to address

Additionally, part of your plan might also include insurance.

What Can Long Term Care Insurance Help You Pay for?

Long Term Care Insurance can help you pay for:

  • Nursing homes & LTC facilities
  • In home daily living services
  • In home personal services

Who Needs Long Term Care Insurance?

According to New York Life Insurance Company, 70% of people age 65 and older will need help with daily living at some point. Moreover, almost 50% of these people will end up spending more than $107,000 on Long Term Care costs.

Reasons People Get LTC Insurance

Here are a few types of people that need Long-Term Care Insurance:

Do I need Long-Term Care Insurance?
  • Independent people who do not want to rely on their family to take care of them or pay for their care.
  • Prepared people that do not have reliable support they can trust to help with their care.
  • Determined people that want enough money to cover in home services so they don’t have to go to a nursing home.
  • Planning people that do not want to drain their retirement accounts with LTC expenses.
  • Finally, people that do not want to end up on Medicaid at any point in their lives.

Does Medicare Cover Long-Term Care?

Many of my clients have asked me if Medicare covers Long-Term Care costs and services. It is a good question, but perhaps not a good answer. The answer is no. Medicare does not cover LTC costs.

Why Doesn’t Medicare Cover LTC?

What is Medicare - Medicare Life Health Co.

To start, long-term care has mostly to do with the support and services you will need for daily living and personal care activities. These are not medical services. Consequently, they are not covered by Medicare.

  • For example, if you need to see a doctor or medical provider, that is a medical expense.
  • In contrast, if you need help using the toilet, that is a long-term care expense.

What About Medicaid?

Medicaid will eventually help you pay for LTC expenses. However, you must be considered below the poverty level before the Medicaid program kicks in.

As an example, my grandparents both lived to be about 87 years old. (Married 67 years!) They had enough money to cover their assisted living expenses for a while, but the last 6 months or so of their lives were spent on Medicaid. They had to do a “spend down” of all of their assets to cover LTC expenses. Once their funds were exhausted, Medicaid kicked in.

In their case, while they had money to spend, they had choices on where they lived and what services they used. However, as soon as the money was gone, they had to move to a place that had “beds” available for Medicaid recipients. As a result, they were moved around a lot in their last year.

On the much brighter side, they were together until the end and passed months apart. They were also happy and loved. So, even though the journey was difficult, we were all in it together. You can read a little more about my care-giving story here.

If you do not want to “spend down” your assets on LTC costs, you will need to have insurance to cover your care costs.

How Does LTC Insurance Work?

LTC is an insurance policy. Consequently, you take it out now to pay for a future event that may or may-not occur.

  • First, you pick a plan with an insurance carrier and structure it to fit your needs. This includes deciding how large of a benefit you want.
  • In addition, your decision will also depend on how much premium you can afford to pay a month for your policy.
  • Premium cost is based on age, and availability of policies are dependent on health underwriting. As a result, not everyone will be able to afford a plan, and not everyone will be able to get a plan. As with most insurance, the younger and the healthier, the better. So, start soon.
  • Then, you keep paying premiums until you need the policy. (Or you cancel the policy because you ended up not needing it. For example, you die before you needed it.)

When Do Long-Term Care Insurance Benefits Begin?

First, in order to start using your LTC policy’s benefits, a licensed medical practitioner will need to certify you chronically ill.

According to Mutual of Omaha, being chronically ill means, “You need help with at least two of the six activities of daily living for at least 90 consecutive days or you need continual supervision due to a severe cognitive impairment.”

The government defines Activities of Daily Living (ADLs), as “basic actions that independently functioning individuals perform on a daily basis.”

ADLs Include:

Caring for Elderly Parents - a how to guide from medicare life health co.
  • Bathing
  • Dressing
  • Using the toilet
  • Transferring (to or from bed or chair)
  • Caring for incontinence
  • Eating

So, you typically need to not be able to do at least two of these to start your benefits.

Do Benefits Start Right Away?

To start, it takes a bit of time to get the right paperwork completed by your doctor, sent in and then certified by the insurance company. Even then, your policy might not kick-in right away.

To keep the cost of LTC insurance lower, many insurance companies will build-in an elimination period. Often, you can decide how long this waiting period will be before benefits begin. Naturally, the longer the waiting period, the less expensive the policy.

Will My Policy Last Until I Die?

Typically, your policy has a set payout rate. This means that it will pay out up to a specific dollar amount. If you outlive this amount, then you will have to use other resources to pay for your care.

How Much will my LTC Policy Cost?

The cost of your policy will depend on your needs, cost of living in your area, your age, your health, and many other factors. To find out an exact cost, you will need to work with an agent to discuss your unique situation.

How Much Long-Term Care Benefit Do I Need?

This is also a question we can’t answer without knowing your needs and situation. If you are wanting a rough idea of what you may need, try out this Long-Term Care Insurance Calculator from Mutual of Omaha.

What are the Alternatives to Purchasing a Long-Term Care Plan?

Long-Term Care Policies are expensive. Additionally, if you wait too long they might not be available to you. One alternative is to spend down your assets until you qualify for Medicaid. If you do not have a lot of assets left by the time you need Long-Term Care, then this may be an option for you.

However, if you have saved money and do not want to drain it all away in medical costs, then you may have another option: Life Insurance.

Do I need life insurance in retirement?

“As an alternative to Long Term Care Insurance, some retirees consider Life Insurance Policies that have LTC riders or a Chronic Illness Rider. For example, an insurance carrier might offer a product (like an IUL policy) with an option to purchase up-front a rider that will cover long term care events. You can pay qualified long-term care expenses with the death benefit, naturally, before death. Then, when you pass, the insurance company pays what is left to your beneficiaries.”

From Our Article: Do I Need Life Insurance In Retirement.

Conclusions

In summary, long-term care insurance can protect you and your family against the rising costs of assisted living and nursing home care. However, it is expensive. You need to plan ahead to either secure LTC insurance early on, or find another option like life insurance with LTC riders.

medicare and medicaid difference guide
Caring for Elderly Parents

Caring for Elderly Parents

Caring for Elderly Parents: A How To Guide

Caring for Elderly Parents - a how to guide from medicare life health co.

Welcome to the ultimate guide to caring for elderly parents and/or grandparents. Aging is a natural part of life, and everyone should have a care plan for themselves and their aging loved ones. This guide helps you make the tough decisions to keep your loved ones safe and happy.

I personally know what it is like to live with elderly loved ones and care for them. I lived with my grandparents right before their health declined enough to move them to assisted living. It was the hardest year of my life. However, it was also rewarding to care for them after all of the years they cared for me.

This guide leads you through the decisions you will need to consider to help your elderly parents.

We will cover:

  • Where can my aging parents/grandparents safely live?
  • What services and products can keep them safe and happy?
  • How can I help them with health care and insurance?
  • Who should be in charge of their finances?
  • Where can I go for support?

Where can my loved ones safely live?

Senior Living Options with Medicare Life Health Co. is part of the caring for elderly parents series.

Helping your elderly parents or grandparents decide where they should live can be very emotional. This is true for all the people involved. The options range from staying at home to full-time care, and everything in between.

Senior Living Options

  • Living at Home – Options exist for helping your seniors live at home as long as possible.
    • There are non-medical care-giving services such as Home Instead and Right at Home. They provide help around the house and companionship, but not medical care.
    • The medical alert devices listed in the services in the next section also help give seniors and you peace of mind in regards to their safety. These are good for the home environment, as well as running around town.
  • Retirement Community / Apartment or Condo – Often times seniors will want to move to a retirement community or 55+ apartment or condo building. Seniors like the social aspects of these communities. In addition, there are add conveniences and informal safety networks in place to give everyone peace of mind.
  • Assisted Living – For seniors that need a level of care below the nursing home, assisted living is a great option. However, these homes can be expensive. There are not always spots open for low income or Medicaid beneficiaries.
  • Memory Care Centers – Dementia and Alzheimer’s is a growing disease in America. As a result, we see more centers and homes dedicated to residents with memory issues.
  • Nursing Homes and Long-Term Care – The last stop on the list is the nursing home / long-term care facilities. There are both private and public options in most cities, but it takes a lot of research to make sure you are finding the best fit for your loved one.

What services / products can keep elderly loved ones safe and happy?

Especially if your loved ones are living at home, there are different products and services that can give everyone peace of mind. These include aides to help with daily activities, as well as alert / check-in services.

Products to Keep Your Loved Ones Safe & Happy

Best gifts for seniors

We love products that keep seniors happy, independent and safe. Happily, more creative and innovative options exist that ever to make life easier. We are constantly on the hunt for life-improving and safety-enhancing innovations.

Best Gifts for The Elderly in Nursing Homes

For now, you can start by looking at our senior gift lists.

We love the idea of thoughtful and helpful house warming gifts for seniors that are making a move. Especially if this move was out of necessity. A little love and thought goes a long way with these big transitions.

Services to Keep Your Elderly Parents Safe

We all worry about falls and accidents. The elderly often experience a decline in balance and strength with each passing year. There are a few options out there of companies that will monitor your loved ones and give them the help they need in case of a fall. When we look at companies to refer you to, we look for ones with good customer service, customization options and no long-term contracts.

Here are our Top Senior Monitoring Picks:

  • MobileHelp – Provides an alert system that works with a “Fall Button” that can automatically detect when a fall occurs. This company gets almost 5/5 stars in most consumer review panels. Learn more here.
  • LifeFone – Is our other top pick for Medical Alert Systems. It also is rated very highly and offers a free trial period. Spouses are also included in their standard pricing, which makes it a good choice for couples.
  • Iamfine – As a different kind of monitoring service, Iamfine is a daily call service that checks in with your loved ones by phone. If they fail to answer after a few attempts, Iamfine will alert your “care circle.” The service has a free 2 week trial period as well.

How can I help elderly parents with health care and insurance?

If your loved one is either older than 65 or disabled, they probably qualify for the Medicare program. In addition, if they are living on a very small income, they could also qualify for Medicaid.

From a high level view, your loved one will need to choose if they want their Medicare coverage to be bundled with a Medicare Advantage Plan or to be put together with Original Medicare, a Supplement and a Drug Plan. These are the two paths to choose from.

Let’s back up now, and break down the parts of Medicare. We want you, the caregiver, to feel as comfortable and knowledgeable as possible when helping your seniors make their decisions.

Helpful Medicare Articles for Caregivers

MedicareLifeHealth.com is a great resource for learning about Medicare. We have articles to show you how to set-up your loved one’s health care. We understand it is so important to make sure they get the coverage and care they need.

Here is where to go for more information:

Who can I call or email for help with Medicare/Medicaid/Health Care Insurance?

MedicareLifeHealth is a national community, but health care questions and registrations are often different state to state. So, we have a couple different resources for you to work with.

Carly Cummings, Medicare and Medigap Expert

If you live in Nebraska or Iowa: Your fearless leader of Medicare Life Health Co. (Carly Cummings – that’s me!) is a licensed life/health agent in NE and IA. I would be glad to help you with your questions and enrollment needs.


Please contact me here.

If you live in all other 48 States: We are building our directory of national insurance agents. Find one now:

Insurance Agents Near Me

Who should be in charge of caring for elderly parents’ finances?

There might come a time when you realize your seniors need help with their finances. As a result, you will discover two phases of caring for your elderly parents’ or grandparents’ finances:

  1. Assisting with their decisions.
  2. Taking over the decisions.

This same process translates to Medical decisions, so we will include information on both.

Durable Power of Attorney

When working with seniors to help them in making financial and medical decisions, you will want to set up “Durable” Power of Attorney (POA). This is a document that will give you (or someone else they trust) power to act in their place if they become mentally incapacitated.

The “Durable” part is important. Regular power of attorney documents end when a person becomes mentally incapacitated. Durable powers of attorney contracts do not. With this document, you will be able to help your elderly parent with important decisions when they cannot.

In addition, you will want to have two separate Durable Power of Attorney Documents:

  1. One for Medical
  2. And one for Financial.

Medical Power of Attorney (POA)

Commonly called the durable power of attorney for health care, this document names the person who will be making health care decisions for your elderly parent.

The named person will be able to enroll the elderly parent in medical plans, speak to doctors on their behalf, and represent their wishes in regards to medical care.

caring for a dying parent - a how to guide from medicare life health co. by crystal bayliss

You will also want to make sure your loved ones have a living will and a regular will. Knowing your loved one’s desires for how end of life care and services will go is very important. Please see our full article on “Caring for Dying Parents” here.

Financial Power of Attorney (POA)

Your elderly family member will also need to name someone to carry out their financial wishes when they cannot. This is where a comprehensive durable financial power of attorney is important.

Note, this should be a separate document from the medical POA. The financial POA allows someone take over your elder’s retirement accounts, taxes, and bills. For this reason, it needs to be someone they trust, and should be done as soon as possible to make sure they are represented in the ways they wish.

Working Together

Finally, although these are two separate documents, you certainly can name the same person on both. In fact, having the same person do both will make life much easier and simpler. If you do have different people named on each document, you will want to ensure they communicate well and can work together effectively.

Where can I get support for caring for elderly parents?

I remember pulling over to the side of the road, one very stressful day, because I couldn’t see through my tears to drive. At the time, I was living with my grandparents and trying to care for them while their health continued to decline.

Caring for Elderly Parents Stress Management: A How to Guide Presented by Medicare Life Health Co.

I was overwhelmed by the amount of work it took to keep them safe in their own home (even with the help of a home care company). Consequently, we were reaching the tipping point of needing to move them to assisted living. However, the thoughts about and process of this change were also just sad. It was a lot for me to handle.

Luckily, I had a very strong support system and access to help. You need this too. You can start by reading this article on managing caregiver stress and preventing burnout.

Find Someone to Talk to Regularly

The first step is to reach out to someone to talk to and confide in. Care-giving takes a lot out of you. As a result, you need someone to listen to you and give back to you. Whether this is a professional counselor, or just a friend, you need to make “talking it out” a priority. Better yet, make your conversations a habit or a standing date.

Seek Outside Help

The second step is to get outside help. If your parent is still at home, see what is in the budget for hiring a care service. Even if just for a few hours a week. These companies help with daily living activities for seniors wanting to still live by themselves. (This is non-medical help.)

Alternatively, you can see what social network your seniors are a part of that might want to help. My mom was excellent at getting visitors for her elderly parents from not only their friends, church member, etc. but also from her own social network. You would be amazed at how many people are willing to swing by a nursing home and say hello during the week. You just have to ask!

Set-up Self-Care

Care-giving makes you busy, tired and often plain run-down. The only way self-care happens is when you make it a priority. Moreover, you need to set it in your schedule as an important appointment.

First, create and stick to a weekly workout schedule. Then, create a routine for getting healthy meals onto your table. Finally, make sure you keep your hair appointments, massages or other healthy ways to relax and stay on top of your health.

I know it is all easier said than done, but you will be much more efficient and helpful if you are well rested and cared for first.

Action Steps for Caring for Elderly Parents

checklist for aging parents and caring for your elderly parents and grandparents

In summary, caring for elderly parents, grandparent and loved ones is a long, hard journey. However, you are not alone! In addition to all the helpful organizations, services and innovations out there, there are also real people that want to love and support you. You cannot, and should not, do this alone.

Here are a few good steps to get you started or move you forward with your loved one’s journey.

  • First, if you are considering housing options, reach out to a home care service. If a move is a necessity sooner or later, start by touring one assisted living center or nursing home.
  • Second, for seniors living at home or even in assisted living, look into a couple of medical alert systems. Falls are all too common, and you need to be prepared.
  • Third, in regards to health care, reach out to a professional to make sure your loved one has the best coverage in their area. Plans change all the time, so a review is always a good idea.
  • Fourth, legally, make sure you understand what your loved one needs and wants in regards to making financial decisions. Get together all the proper documents needed to secure current or future Power of Attorney options.
  • See in your loved one has any Long-Term Care Insurance in place. Additionally, they could have a life insurance policy with a Long-Term Care Rider or a Critical Illness Rider.
  • Finally, create a plan now for taking care of yourself and start implementing it right away. You deserve it. Thank you for taking care of your elderly parents and loved ones.
Do I need Long-Term Care Insurance?
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