Long-Term Care Insurance

The prospect of needing extended care as we age or due to chronic illness or disability is a reality that many individuals and families will face. While Medicare and standard health insurance cover acute medical needs, they are not designed to cover the vast majority of Long-Term Care expenses. This critical gap in coverage can lead to immense financial strain, depleting life savings and potentially burdening family members. At Glangy Dixon – Well Plus Insurance, we specialize in helping individuals proactively plan for these costs through comprehensive Long-Term Care Insurance, providing peace of mind and protecting your financial legacy.

Long-term care refers to a range of medical and non-medical services needed by people who have a chronic illness or disability that prevents them from performing daily activities such as bathing, dressing, eating, continence, toileting, and transferring (moving from bed to chair, for example). These services can be provided in various settings:

• At Home: Services like skilled nursing care, physical therapy, occupational therapy, and personal care assistance provided in your own home. This is often the preferred choice for comfort and familiarity.
• Assisted Living Facilities: Residential settings that provide supervision or assistance with daily living activities, medication management, meals, and social activities.
• Nursing Homes: Facilities that provide 24-hour skilled nursing care for those with more significant health needs.
• Adult Day Care Centers: Provide supervision, social activities, and some health services during the day for individuals who live at home.

The cost of long-term care is significant and continually rising. A year in a nursing home can easily exceed $100,000, and even in-home care, while potentially less expensive, can accumulate to substantial amounts over time. Without proper planning, these expenses can rapidly erode retirement savings, investments, and even the equity in your home, impacting not only your financial security but also the inheritance you hoped to leave your loved ones. Traditional health insurance, including employer-sponsored plans, typically covers only short-term rehabilitative care, not ongoing custodial care. Medicare covers only very limited skilled nursing care for a short period under specific conditions, and it does not cover custodial care at all. Medicaid, while covering long-term care, requires individuals to spend down most of their assets to qualify, leaving little or nothing for their families.

Long-Term Care Insurance is specifically designed to bridge this financial gap. It provides a daily or monthly benefit to cover the costs of these services once a policyholder meets specific eligibility criteria, typically when they are unable to perform a certain number of Activities of Daily Living (ADLs) or have a cognitive impairment like Alzheimer’s.

When considering a long-term care policy, several key features are crucial:

• Daily or Monthly Benefit Amount: This is the maximum amount the policy will pay for care services each day or month. We help you determine an appropriate amount based on the average cost of care in your geographic area and your desired level of coverage.
• Benefit Period: This dictates how long the policy will pay benefits (e.g., 2 years, 3 years, 5 years, or lifetime). A longer benefit period offers more comprehensive protection.
• Elimination Period (Waiting Period): The number of days you must pay for care out-of-pocket before the insurance benefits begin. Common elimination periods range from 30 to 90 days. Choosing a longer elimination period can result in lower premiums.
• Inflation Protection: Crucially important, as the cost of long-term care rises significantly over time. Inflation riders (e.g., 3% or 5% compound annual growth) increase your daily benefit amount over time, ensuring your coverage keeps pace with rising costs. Without this, a policy purchased today might offer inadequate benefits 20 or 30 years from now.
• Types of Coverage: Most modern policies are comprehensive, covering care in all settings – home, assisted living, and nursing home.

In recent years, the market has seen the emergence of Hybrid Long-Term Care Policies, which combine long-term care coverage with life insurance or an annuity. These “asset-based” policies offer several advantages:

• “Use It or Lose It” Concern Addressed: If you never need long-term care, the policy’s death benefit still pays out to your beneficiaries, or you can receive a cash surrender value. This addresses the common concern with traditional LTC policies that premiums are “lost” if care is never needed.
• Guaranteed Premiums: Unlike some traditional LTC policies, hybrid policies typically have guaranteed premiums, providing stability and predictability.
• Tax Advantages: Premiums might be paid with a single premium or over a limited number of years, and the long-term care benefits are generally received tax-free.

When Glangy Dixon – Well Plus Insurance guides you through the process, we assess your personal health, financial situation, and family history to determine the most suitable type of policy and its features. We work with leading long-term care insurance carriers, allowing us to compare various options and find the most competitive rates for the coverage you need. The underwriting process for long-term care insurance involves health questions and sometimes a medical exam or cognitive assessment, so it’s generally advisable to apply when you are in good health, ideally in your 50s or early 60s. Applying too late can result in higher premiums or denial of coverage due to pre-existing conditions.

Our consultation goes beyond simply finding a policy; we help you understand the triggers for benefits, the claims process, and how long-term care insurance integrates with your broader financial and estate plan. We provide clear, unbiased advice, ensuring you fully grasp the implications of your choices. By planning for long-term care, you secure your dignity, preserve your assets, and alleviate a significant potential burden on your loved ones, allowing them to focus on providing emotional support rather than financial management. Let Glangy Dixon – Well Plus Insurance empower you with a robust long-term care strategy, ensuring a future of independence and financial security.