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Long-Term Care Insurance

When my parents retired they paid a visit to me in Arizona. At the time I was still working in the Securities industry as a financial advisor. I suggested to them a Long-Term Care Policy. I simply explained to them you either die slow or fast. In today`s high tech health care that more often means dying slow hence the need for Long-Term Care Insurance.

My parents were depression era poor kids growing up. My Father said they were going to skip that LTC stuff and we left it at that. I was never a high-pressure salesman and sure did not want to be one for my parents. They did not buy a Long-Term Care policy and we all lived to regret it.

It started with my Mother`s sister passing away and while she never had the need for LTC her estate liquidation was rather labor intensive and time consuming. A Final Expense policy would have helped.

My Brother followed who was some 11 years younger than I. He contracted Frontal Temporal Dementia (FTD). Without any insurance whatsoever it was an eight-year battle that almost bankrupted our whole family. A side note, for those that would like to dismantle and eliminate all welfare programs the bottom line here is if we would not have eventually got my Brother on Social Security Disability our family would have gone bankrupt. Age may not matter you never know for sure when you are going to need LTC or Final Expense insurance.

My Father followed with a different type of dementia and could no longer walk and my Mother could no longer take care of him. I remember the phone call when she called me to come help and declared,

"Boy, do I wish we would have purchased that LTC policy when you presented it to us"

The above example shows Why you plan for long-term care?

Deciding to buy LTC is kind of like buying auto tires, not too many people get to excited about it. It is just another paradox of insurance you may never need it but if you do it would be the most important thing in your life. If you don't ever need it and it is a stand-alone policy its kind of use it or lose it. However, its not a cash back reward you paid for the insurance.

If you buy LTC through a hybrid insurance policy you are buying whole life insurance and any LTC benefit will decrease your cash value. So, in other words if you bought the policy for relatives to have cash available to them upon your death the actual cash available may not be there in whole if used for LTC. Nonetheless, a hybrid insurance policy solves the stand-alone policy use it or lose it issue. Remember, long-term care benefits in a hybrid insurance policy are not as good with a stand-alone traditional long-term care policy In addition with hybrid insurance you are paying the insurance company to bundle the two types of insurance for you.

Often it is easier to qualify for a hybrid Insurance policy than a stand-alone long-term care policy if you're older. Underwriting is not so strict., premiums will be lower if you're younger and in good health. It is imperative whether you buy a hybrid insurance policy or a stand-alone LTC policy don't wait untill you already need it.

Long-Term Care policies have elimination periods you choose. The longer the elimination period (how long you pay for LTC before benefits kick in) reduces the premium. Stand-alone LTC usually has up to 90-day elimination periods while hybrid policies can be as far out as 2 years. Also, Hybrid policies may not have inflation protection which is now fairly standard in stand alone LTC.

If you have permanent life insurance policy with cash value you might be able to convert it to a hybrid policy using a 1035v exchange. In addition to the LTC benefit you are buying more insurance.

The same is true for Critical or Chronic Illness riders on hybrid insurance policies. Monies used for this events come out of your death benefit. There is no free lunch. Hybrid policies are not the best value for your dollars in obtaining LTC.

I believe a Stand-Alone LTC is the best choice for the larger percentage of consumers.

The younger you buy them the cheaper they cost. Hybrid Insurance Policies with LTC Riders are best purchased when you are young and accumulate cash value over you lifetime. I'm not a big fan of plunking down $50,000.00 - $100,000.00 and more on an insurance policy to pay for LTC. If your assets are enough to do this then that can work for you but most American's are not in that camp. Even when they are it's a distasteful way to spend money. The average stay in a nursing home is just under 4 years. Do the math before you plunk down those kind of funds. Some policies today can pay for in-home care for those that desire that.

Medicare will not pay for long-term care, which is assistance with what are called the activities of daily living. There is about 7 or them how many you cannot do is what triggers benefits in many policies. Some might still be triggered by simply the physician just saying you need it. If you qualify Medicaid will cover the cost of long-term care at home and in skilled nursing facilities. It currently is the primary payer in the nation for long-term care services. However, you must have limited income and assets to qualify for Medicaid. You may have to spend down your assets to qualify and if you do qualify it would most likely put you in a lower cost group home.

That is what happened to my brother and at one point we had to change the group home he was living at do to the quality of care he was receiving at that group home. The group home completely changed personnel not only were they not taking care of him they were stealing his personal items like shoes.. Medicare nor Medicaid will put you in the best of assisted living or nursing care facilities for Long-Term care needs. Often, the facilities charge based on how much care the patient needs.


The longer you wait to buy long-term care insurance, the more it will cost. Health problems can make it more costly or even impossible to get coverage. For example my brother already had memory loss and he did not qualify. Some insurers require a physical exam or medical-record review; others only conduct telephone health interviews.

If you are still working group policies can be affordable and helpful. Some of the 403b insurance heavy retirement plans with employers can provide LTC Benefits.

Talk with our insurance agent who is authorized to sell policies from multiple companies. They can present your options so you have a full understanding. It's really important to have an independent agent who doesn't have a commission centered interest in any one insurance company.

Do you want a policy that you can receive benefits for in home care?