It’s a fact: people are living longer today. That’s great news. That also means the odds of requiring some sort of long-term care, be it home care, a nursing home, or assisted living, will go up as you age.

Yikes. The associated costs can sound a little scary – especially if you have assets you would like to protect. A solution that’s gaining in popularity is long-term care insurance (LTCI).


Who is eligible for Long-Term Care insurance?


LTCI is not just for the elderly. It applies to anyone who can no longer independently perform basic activities of daily living (ADLs) – such as bathing, dressing, or eating – due to illness, injury, or cognitive disorder. LTCI covers a large number of settings – private homes, assisted living facilities, adult day care centers, and nursing homes.


If I already have health insurance or Medicare and Medigap won’t that cover my needs?


Hopefully you’ll never need long-term care but you should be prepared for the possibility. HMO’s, Medicare, and Medigap don’t pay for most long-term expenses which can be very pricey. This means you would have to exhaust a large portion of your life savings before you become eligible for Medicaid – which has strict financial eligibility requirements.



This being said – a LTCI policy isn’t for everyone. Here are a few things to consider:


· Are you between the ages of 40 and 84?

· Do you have significant assets you would like to protect?

· Can you afford the premiums (now and in the future)?

· Are you insurable and in good health?

· Do you treasure peace of mind for yourself and your loved ones should the need for long-term care arise?


What will it cost me to get a LTCI policy?


No doubt about it: it’s often expensive. Still – the cost depends on many factors, including the type of policy (size of benefit, length of benefit, etc…). Premiums are also based, in large part, on your age at the time of purchase. The younger you are the lower your premiums will be.


OK – so I’ve decided it’s right for me. How does it work?


Typically, it works like this: you pay a premium, and when the benefits are triggered the policy pays a selected dollar amount a day (for a set period of time) for the type of case outlined in the policy. Most policies provide that certain physical and or mental impairments will trigger benefits. The most common method is based on your inability to perform certain activities (ADLs) such as eating, bathing, dressing, continence, toileting, and transferring (moving in and out of bed). Normally, you’ll need 2 or 3 ADL’s in order to collect benefits.


Some policies, however, will begin paying benefits only if your doctor certifies the care to be medically necessary. Others will offer benefits for cognitive or mental incapacity demonstrated by your inability to pass certain tests.


Can you give me a real-life example?


Sure. Karen purchased a policy shortly after becoming widowed. Her goals were to continue living in her home if and when she should become incapacitated, and, in so doing, preserve as many of her assets as possible as a legacy for her children. As Karen aged her ADLs increased and she became eligible to start collecting on her insurance. Today, Karen is living in her home with full-time care paid for by her LTCI policy. In addition to Karen being able to remain in her home she has peace of mind knowing that her assets are protected for the life of her policy.


Who can I contact should I have more questions?


We at Heritage Advisory Group are here to answer any further questions you should have regarding a LTCI policy. You can be rest assured in our experience and knowledge on this subject.