AboutLong Term Care

By long term care, we are referring to what is called "Chronic Custodial Care," vs. "Acute Medical Care" (Doctors, hospitals, medications). Neither Medicare nor your Medical policy will pay for custodial care. The cost of care is very expensive; the current national average is $62,000/year, and previous records indicate these costs are doubling about every 15 years ($124,000/year). (Long Term Care Insurance policies have an Inflation Protection Option that is designed to keep pace with this accelerating expense.) Although no one can foresee the future, the national statistics specific to this risk suggest that approximately 1 in 2 women, and 1 in 3 men will need some form of care before they pass away; and for couples, 7 out of 10 will experience one of the spouses needing care.

About Long Term Care Insurance

Long term care insurance is intended to cover some or all of the cost of this care, regardless of where care is received. These plans are "triggered" when a policy-holder experiences an inability to live independently which requires assistance in 2 of 6 "activities of daily living," or when it is determined that care is needed due to "cognitive impairment" (Alzheimer's, or some other form of dementia, which no medical policy covers).

The cost of this insurance can vary greatly, as there are a number of building blocks or strategies that go into designing a LTC plan, (see "Kip Tip" video on plan design--excuse the commercial) and premiums will be based on these various selections. Among the elements for consideration should be your current age and health, marital status, in what state or part of the state you plan to retire, other available financial and family resources, family traditions, etc. Since premiums are initially based on the cost of care in your area, (click on your state) it will be important to determine that as well. Also part of the equation is the fact that there is no one company that is always the most competitive, and that, in this industry, it really pays to shop. Usually, it is best to reach a balance between how much risk to transfer to the insurance company, and what you feel you want to comfortably afford. Obviously, it is critical to have a conversation with an independent and knowledgeable Agent who can review the various options with you and help you sort out which seems to be a "best fit" for you and your situation.

Underwriting

One of the Consultants Group's "best practices" is that we determine ahead of time what underwriting challenges we will encounter with each company before we e-mail our quote. This is done in order to provide you with the most accurate reflection of each company's premiums. However, there are certain uninsurable conditions that would preclude someone from purchasing this coverage. (By completing our Qualifying Questionnaire and e-mailing it to us, along with your contact information, we will obtain an underwriters opinion on your health qualifications for you.) Or, you could give a quick call to our specialists, who can often answer your questions over the phone.

Because today's long-term care insurance policies offer a variety of features and benefits, it pays to take your time when choosing your policy. In this section we will help you take a look at what makes up a good policy and the benefit options available to you.

Other informational resources

To see what MSN MONEY, Kiplinger Financial, Dateline, and others have to say about long term care insurance, visit our THE LTC LIBRARY site.