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Long Term Care Insurance FAQs

In choosing a long term care insurance policy you should consider the features

listed below.

Stable Premiums:

Premiums that will not be influenced by any change in your age or health, and will not change during the life of the policy. Insurance companies do reserve the right to change rates on a statewide basis.

Guaranteed Renewable:

The insurance company can't cancel the long term care insurance policy unless you fail to pay the premium.

Covers Mental Conditions:

Covers mental and nervous conditions due to any organic brain disease, including Alzheimer's Disease.

Exclusions:

Exclusions should be minimal and should not adversely affect your stated insurance protection goals.

No Pre-Existing Conditions:

 All previous medical history admitted on the long term care insurance application and is approved for a policy, is of no consequence in the future.

Waiver of Premium:

The insurance company allows you to stop paying premiums once you've begun receiving benefits. There can be waiting periods of up to 90 days before this waiver takes effect, and it may not be available when home health care is purchased.

Costs

No matter what age you are now, it's doubtful that you will pay more over your entire life in total premiums for long term care insurance than you would pay for only a one year stay in a nursing home. The cost of nursing home care has risen at an average rate of 7% per year for the last 15 years. Today's average cost of care in South Carolina is about $141,000, but inflation rates will propel this cost much higher. An average inflation rate of 6% over the next twenty years would more than triple the cost of nursing home care.

Facts

Medicare pays for less than 10% of all nursing home costs. Over 50% of the U.S. population will require long term care at some point. 38% of the 13.5 million Americans currently receiving long term care are between the ages of 18 and 64. More than 76% of people receiving long term care, receive it in their home or in other community environments.

There are 6 primary factors influencing the premium for long term care insurance

policies:

Type of Policy:

 Facility, Home Health Care, or Comprehensive

Age:

The most important element in determining the premium. Naturally the earlier you start paying for long term care insurance the better.

Daily Benefit:

The maximum amount a policy will pay for one day of care. This can vary from $50 per day to over $400 per day. You will decide whether to purchase sufficient insurance to cover all of these costs or only most of them.

Benefit Limit:

The number of years that a plan will pay a benefit from the time you get sick. Benefit limits generally vary from one year to lifetime coverage. The longer the benefit limit, the greater the protection but the higher the cost.

Inflation Protection:

Sometimes called an "inflation rider", this provides you with a way for your daily benefits to increase over time. Otherwise, the policy may not be sufficient to protect you many years from now. Long term care insurance policies normally contain riders offering automatic daily benefit increases of 5 percent each year, either at "simple" or "compounded" rates.

Elimination Period:

Amount of time that you agree to pay out of your own pocket before the plan (policy) begins to pay. This period normally varies from 0 to 100 days. The 100-day elimination period will produce the smallest premium cost to you.

Long Term Care Insurance (Nursing Care)

There are three levels of nursing care that are covered by a South Carolina long term care

insurance policy:

Custodial care: Care necessary due to a permanent or chronic illness or injury, which is less intensive, but which may continue indefinitely. This nursing care helps a person perform activities of daily living or supervises a person if cognitive impairment exists. Many custodial care situations start with a mild degree of illness which is followed by slow deterioration. Alzheimer's disease is one example where custodial care is usually needed. Other types of insurance policies do not offer custodial care benefits. The value of long term care insurance for you or a family member and protecting a lifetime of created assets is never more evident than in custodial care nursing services.

Skilled care:

Short term nursing care needed after an illness or serious injury. Consists of rehabilitative and intensive 24 hours per day care.

Intermediate care:

Rehabilitative care by a nurse for up to six months and when less than 24-hours per day supervision is needed.

Skilled care:

Short term nursing care needed after an illness or serious injury. Consists of rehabilitative and intensive 24 hours per day care.

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