Extended Care/Long-Term Care planning is not just about covering the cost of care. There are many aspects to consider before an LTC event occurs to help ensure your wishes are fulfilled and that everyone involved is prepared. The below Q&A provides additional information that may help you with your planning journey.
Q: What government assistance programs are available?
A: While there are government assistance programs for people who become compromised, a common misconception is that Medicare will provide LTC benefits, but this is not accurate.
Q: Am I too old to obtain LTC insurance?
A: We believe the best way to address an LTC plan is to meet with your advisor to determine what makes sense as part of an overall financial plan. Maximum issue age differs per carrier, but generally, options are available up to age 85.
Q: What types of LTC policies are available?
A: Traditional LTC, Hybrid Life/LTC, and Asset-Based LTC insurance policies are available. These products require medical underwriting. Details about the cost, benefits, limitations and exclusions of these policies and long-term care insurance riders can be provided to you by a licensed insurance agent/producer. Your licensed advisor can help you determine what may be appropriate for your situation.
Q: Do premiums always increase on long-term care policies?
A: Traditional LTC can and does experience premium increases. The Hybrid and Asset-Based plan premiums are guaranteed when established and will not increase. However, traditional LTC may provide certain protections that asset based long-term care does not. In some cases, funding long-term care costs with annuities or life insurance may be a suitable strategy. As with any insurance product, it is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage. Please consult with your licensed advisor.
Q: What is the eligibility to receive benefit from a long-term care policy?
A: Traditional LTC can and does experience premium increases. The Hybrid and Asset-Based plan premiums are guaranteed when established and will not increase. However, traditional LTC may provide certain protections that asset based long-term care does not. In some cases, funding long-term care costs with annuities or life insurance may be a suitable strategy. As with any insurance product, it is possible that coverage will expire when either no premiums are paid following the initial premium, or subsequent premiums are insufficient to continue coverage. Please consult with your licensed advisor.
Q: Is submitting receipts for LTC services required to receive monthly benefits?
A: There are two ways to receive monthly benefits: reimbursement and indemnity. If monthly benefits are paid on a reimbursement basis, then receipts are required. If benefits are paid on an indemnity basis, receipts are not necessary.
Q: Do I have a choice of care facilities with a LTC policy?
A: This depends on the type of policy. Some traditional long-term care policies might cover care in certain settings only. However, most new policies are comprehensive, and you will have access to home health care, assisted living, and skilled nursing care, as well as additional benefits. With reimbursement plans, you are required to use a licensed healthcare facility or provider. Indemnity plans give you the flexibility to use any provider you want, even a family member.
Q: If I have sufficient assets to cover extended care expenses, why do I need LTC insurance?
A: LTC insurance offers significant leveraging of your dollars and helps protect your assets from unnecessary spend down. Further, having LTC insurance avoids the need for hasty financial decisions, offers protection from rising long-term care costs, and provides peace of mind.
Q: How much is the cost of long-term care?
A: The latest long-term care cost survey conducted by Genworth is available here. You can also visit the Genworth website to calculate the estimated cost of care in your area.
If you or someone you know could benefit from a conversation with one of our insurance licensed advisors, we would be happy to provide a complimentary consultation.
* Beacon Pointe Advisors, LLC and Beacon Pointe Insurance Services, LLC do not endorse any insurance company or product. Insurance and annuity products are not depositions, not guaranteed by a bank or its affiliates, not insured by the FDIC or other federal government agencies and may decrease in value. All guarantees and benefits of the insurance policy are subject to the claims-paying ability of the issuing insurance company.
Important Disclosure: This commentary is provided for general information purposes only, should not be construed as investment, tax or legal advice, and does not constitute an attorney/client relationship. Past performance of any market results is no assurance of future performance. The information contained herein has been obtained from sources deemed reliable but is not guaranteed. Beacon Pointe Advisors, LLC is under common control with a related insurance agency, Beacon Pointe Insurance Services, LLC (“BPIS”). Certain employees are licensed insurance agents of BPIS and are compensated for the sale of insurance products. Client will not pay both a management fee and commission for such products.
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