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Frequently Asked Questions About Long-Term Care Insurance

Purchasing long-term care insurance could be an excellent decision for anyone looking to protect themselves in the event that they require long-term care. Long-term care insurance is one of the most common ways to prepare for extended illness and ensure that costs will be covered when those in need may not otherwise be able to afford it. However, evaluating plans and selecting the appropriate long-term care insurance policy can be a complex process. The estate planning attorneys at Roulet Law Firm, P.A. provide answers to some of the most frequently asked questions about long-term care insurance below. Those ready to start their comprehensive estate plan can contact our Minnetonka, MN office at (763) 420-5087 or our Venice, FL office at (941) 909-4644 or through our convenient contact form.

What Are Some of the Drawbacks of Long-Term Care Insurance?

There are a number of potential drawbacks with long-term care insurance. First, due to age, health or other reasons, you may find that you do not qualify. Even if you qualify, you may find that you cannot afford the premiums. As the costs of care continue to increase, policy premiums are also increasing to keep pace. That means many people find that they cannot afford the premiums as they get older and are most likely to need the insurance.

Another drawback is that the policy may not cover everything. I once had a woman tell me that she didn’t think she needed to do planning because she had a long-term care insurance policy. When we reviewed it, we explained to her that her policy limits were $4,000 per month for a maximum of two years. However, the average semi-private nursing home room at the time averaged over $11,000 per month and the average length of care for a woman was 3.7 years. That meant if she went into a nursing home, the insurance would only cover $4,000 per month and she would be responsible for the balance. After two, years, the policy would be done and she would then need to cover the expenses herself.

Another potential drawback is that exclusions and other limits in the policy may mean it doesn’t cover the type of care you may need.

According to the Internal Revenue Service (IRS), individuals may in some cases be able to include their long-term care insurance premiums among their medical expense deductions on annual taxes.

What Questions Should I Ask About Long-Term Care?

Even when some or all of the costs are covered by an insurance plan, choosing a facility for long-term care can be challenging. Some helpful questions to ask before setting up long-term care at a specific facility may include:

  • Does the facility accept Medicaid or Medicare?
  • What is the staff-to-patient ratio?
  • Is there a nurse available at all times?
  • What services does the long-term care facility offer?
  • What types of activities are available to long-term care facility residents?
  • Are care plans customized?
  • What are the long-term care facility inspection ratings?

An experienced estate planning attorney may be able to answer your questions about long-term care insurance and how to integrate preparations for long-term care into your estate plan.

What Are 5 Factors That You Should Consider When Buying Long-Term Care Insurance?

Five essential factors to consider when purchasing long-term care insurance include:

  • The policyholder's age
  • The daily benefit amount
  • How long benefit payments will be issued
  • The policy’s inflation protection coverage
  • The waiting period before long-term care benefits begin

What Are Some Common Exclusions For Long-Term Care Plans?

The United States Department of Health and Human Services explains that the circumstances under which public options, like Medicare, will cover long-term care are limited. Multiple exclusions for private long-term care plans are also standard. Examples of policy exclusions could include:

  • Drug addiction
  • Mental illness
  • Self-inflicted injuries
  • Alcoholism

Long-term care plans can also exclude long-term care in government nursing facilities and coverage while the policyholder is out of the country. However, long-term care plans are prohibited from excluding or limiting benefits for some circumstances, such as:

  • Demonstrable organic brain disease
  • Senile dementia
  • Alzheimer's disease

Should I Buy a Long-Term Care Insurance Policy?

Estate planning inherently involves making decisions for the future on the basis of limited information in the present. In many cases, it is not possible to establish with certainty whether buying a long-term care insurance policy is in an individual's best interests. Although making provisions for long-term care is an essential aspect of the estate planning process, it is important to consider whether individuals can afford regular monthly premiums, the potential for premium increases, and the duration of long long-term care benefits relative to the premium policyholders will pay over time.

Alternatives to long-term care insurance could include a reverse mortgage, gains from investments, personal savings and planning to protect your home and savings from long-term care and nursing home costs.

If I Move to Another State After Buying a Long-Term Care Policy, Will I Still Be Covered?

Individuals who move to another state after purchasing long-term care insurance may often be protected across the country. However, it is vital to determine whether the long-term care policy defines the specific healthcare providers and assisted living facilities that will qualify for coverage. This way, policyholders avoid making the mistake of selecting long-term care insurance that does not allow them to access benefits in another state.

Long-term care insurance policyholders in Florida and Minnesota who are considering a move to another state may wish to consider contacting the experienced Florida and Minnesota estate planning attorneys at Roulet Law Firm, P.A. to discuss their individual needs.

What Is the Best Long-Term Care Insurance Policy for Me?

There is no one type of long-term care insurance that will be the right fit for everyone. Each individual's circumstances are unique. Someone who is widowed may have different economic needs than someone who is married. Gender may also play a role, as women often live longer than men and may require additional long-term care services in an assisted living or nursing home facility.

If I Buy a Long-Term Care Policy Before My Next Birthday, Will My Premium Be Lower?

Insurance companies do base long-term care (LTC) policies on the policyholder's age. However, the difference in monthly premiums may not be significant enough to justify purchasing a policy without careful consideration. Individuals should never feel pressured into purchasing a long-term care policy if they are simply hoping to lock in a reduced premium.

Do I Really Need Inflation Protection?

Inflation protection is not legally required, but ideally should be included in an individual’s long-term care insurance policy. This is because LTC policies cover daily care at a fixed rate. Since this loses buying power over time, a long-term care insurance policy without inflation protection is likely to pay only for a portion of the amount it covers today by the time coverage is needed, due to inflation. Inflation protection coverage can help ensure policyholders have access to the benefits and long-term care they need when they need it most.

What Is The Right Age for Buying Long-Term Care Insurance?

There is no one right age at which to purchase long-term care insurance coverage. The younger an applicant is, the lower their premiums will be. After 60 years of age, long-term care insurance premiums rapidly increase. However, individuals’ personal health and prognoses vary widely. In addition, since times are always changing, the services and facilities included in a long-term care insurance policy may be significantly different in the future than they are when the policyholder purchases a long-term care insurance policy.

Will I Be Able To Stay out of A Nursing Home if I Buy a Long-Term Care Policy?

Comprehensive long-term care insurance policies include protection for care in virtually any setting. This might consist of nursing homes and assisted living facilities. Unfortunately, if a nursing home is the only location that can provide the care a long-term care insurance policy holder needs, avoiding a nursing home environment may be difficult.

Get Help From Our Estate Planning Attorneys Today

Deciding whether long-term care insurance should be included when creating estate plans is crucial. These are just a few of the most frequently asked questions about long-term care insurance. If you have further questions about long-term care insurance, consider contacting the experienced estate planning attorneys at Roulet Law Firm, P.A., for a confidential consultation. Fill out our secured contact form or call our Minnetonka, Minnesota office at (763) 420-5087 or our Venice, Florida office at (941) 909-4644 to get started as soon as today.

And, if you would like to learn how to protect your home and life savings from long-term care and nursing home costs, click here to download our FREE guide Save our Home: How to Protect Your Home and Life Savings From Long-Term Care and Nursing Home Costs.

And, if you would like to learn how to make it as easy and inexpensive as possible for your family to manage your affairs during incapacity and after passing, while ensuring your assets only go to whom you want and how you want, click here to register for our FREE online masterclass.

Chuck Roulet
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Nationally Recognized Estate Planning Attorney, Author, and Speaker
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