Janine Tate knows about Long Term Care Insurance. She’s a Long Term Care Plan Insurance Specialist at ACSIA Partners, one of the largest distributors of long term care and related insurance products and services in the United States. With 11 years experience, Janine has helped hundreds of individuals and families find insurance for their specific needs.
Long term care insurance (LTCi) has been available since the late 1970s. Since then, the choices in care for consumers in the United States has exploded. We now have assisted living, memory care, independent living, home-plus homes, home care, home health, and more. Long term care insurance has had to adapt as new types of care has become available, and as consumers seek more value than nursing home support.
Today, carriers offer a variety of long term care insurance products. Their terms, requirements, and costs can get confusing very quickly; it helps to consult with a long term care insurance specialist like Janine. She keeps up to date on the latest products, who they’re for, and how to purchase them.
Recently, I sat down with Janine to learn about some of the newer choices available in LTCi.
Lauren Bond: Who are long term care insurance policies for?
Janine Tate: Long term care insurance provides catastrophic risk coverage. The price of medical care has skyrocketed over the past 40 years, and people are living longer, often with chronic conditions. It gets expensive, and it can deplete a lifetime of retirement savings quickly.
Anyone who has saved for retirement and wants to protect their savings should consider LTCi. The insurance transfers the risk from a person’s own savings to the insurance company. Even people with modest savings can benefit.
LB: What trends are you seeing in the LTCi industry?
JT: One trend is how the myth still exists to this day: people still think that long term care is covered by health insurance, either Medicare or private insurance. This is just not true. Health insurance covers healthcare, and healthcare is only a part of the expense.
A second trend is that carriers (the companies that provide insurance) understand that they will likely need to pay on many of their policies. As a result, they are making their underwriting much more strict. Underwriting is the process the carriers use to determine whether or not to offer an individual coverage. They are taking a close look at applicants’ medical history and their family’s medical history.
People may not realize that carriers can decline to cover them based on their health information. Increasingly, they include family history in their decision.
One major risk to the carrier and the client is a diagnosis of dementia or Alzheimer’s Disease. Clients who need supervision and help due to cognitive issues usually need care for longer periods of time. This gets very expensive.
Consequently, carriers now look at the client’s medical history, the immediate family history, and results from cognitive screening tests.
LB: What kinds of policies are available now?
JT: There are so many options now, it really is necessary to talk with a LTCi professional. We balance the benefits the consumer wants with the consumer’s eligibility, along with the cost of the premium.
LTCi professionals factor in the person or couple’s health, their family health history, their finances, and their preferences when identifying the best insurance products for them. An example of a personal preference could be that a person desires to stay at home through the end of life. They would need a policy that covers home health and personal care services from basic assistance all the way up to 24/7 care.
Some policies are very broad in what they will cover, while some are very specific.
Clients may wish to consider a Hybrid Policy. This option combines two products to pay for care including either a death benefit or an annuity with a long term care rider. This combination gives the client more leverage than privately paying for care, and it can be more strategic use of money from a tax perspective. These tend to have higher premiums, but they offer a variety of payment options. The carriers tend to fix the premiums on these options, and they will not go up over time.
More carriers are offering a Cash Solution. Partial or full cash policies are available. Cash or indemnity options are where the carrier writes the client a check each month, and the client decides on their care. This can be a great option for those wanting broader choice in care.
LB: What kinds of choices?
JT: For example, a traditional style policy offers may cover home health care and personal care from licensed agencies only. This is great, but then they don’t cover non-traditional services an older adult may need or want. They do not cover services for care management and advocacy (like what Care is There provides), and they do not cover care services provided by a family member. A cash plan can pay for many other things that provide quality of life.
My recommendation is for everyone to get some kind of LTCi because it is so much better than failing to prepare at all. People may think they can self-insure from their own savings. But no one knows how the costs will change over time, and what seems like a lot of money now may not go very far when the time comes.
As you can see, LTCi has many options and variables. If you are considering long term care insurance, it would be wise to find expert consultation by a LTCi professional you are comfortable with. Getting older in the US is expensive, and LTCi is a pragmatic way to prepare.