Insurance
Long Term Care
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Many of us worry about who would take care of us if something happens, and no one wants to be a burden.
Long term care (LTC) is the assistance or supervision you may need when you are not able to do some of the basic activities of daily living (ADL) such as:
Here are some helpful resources to learn more about these subjects A stand-alone long-term care (LTC) insurance policy is designed to help cover the costs associated with long-term care services, which are not typically covered by health insurance, Medicare, or Medicaid. Here’s how it generally works:
Policy Purchase
You purchase a stand-alone LTC policy from an insurance company. The policy will specify the terms of coverage, including the types of long-term care services covered, benefit amounts, duration of coverage, elimination periods, etc.
Premiums
You pay regular premiums to the insurance company to keep the policy in force. Premiums can vary based on factors such as your age, health status, the amount of coverage you choose, and the features of the policy.
Eligibility for Benefits
To qualify for benefits, you typically need to meet certain eligibility criteria specified in the policy, such as being unable to perform a certain number of activities of daily living (ADLs) independently or being diagnosed with a cognitive impairment.
Benefit Triggers
Once you meet the eligibility criteria, the policy will start paying benefits. This could include coverage for services such as nursing home care, assisted living facility care, in-home care, adult day care, and other types of long-term care services specified in the policy.
Benefit Period
The policy will specify a maximum benefit period, which is the maximum length of time for which benefits will be paid. This could be a certain number of years or a maximum dollar amount.
Benefit Amount
The policy will also specify the maximum daily or monthly benefit amount, which is the maximum amount the policy will pay for covered services each day or month.
Elimination Period
Many LTC policies have an elimination period, which is a waiting period before benefits are paid. During this time, you are responsible for covering the costs of care. The length of the elimination period can vary depending on the policy.
Policy Exclusions and Limitations
It’s important to carefully review the policy for any exclusions or limitations on coverage. Some policies may exclude coverage for certain pre-existing conditions or may have limitations on coverage for certain types of care.
Claim Process
When you need to use your LTC insurance, you’ll need to file a claim with the insurance company. The claims process typically involves providing documentation from a healthcare provider to verify your eligibility for benefits.
Coverage Renewal
As long as you continue to pay your premiums, the policy will remain in force, and you’ll continue to have coverage for long-term care services according to the terms of the policy.
Loans and withdrawals
If taken, will reduce the death benefit. Loans and withdrawals from life insurance policies that are classified as modified endowment contracts may be subject to tax at the time that the loan or withdrawal is taken and, if taken prior to age 59½, a 10 percent federal tax penalty may apply. If tax-free loans are taken and the policy lapses, a taxable event may occur. Guarantees are based on the claims-paying ability of the issuing insurance company.
A need for long term care may result from:
Providing long term care can be time consuming, expensive and exhausting. Help protect your family and get the information you need to see if long term care insurance should be a part of your plan.
Hybrid Long Term Care Insurance
Hybrid Long Term Care Insurance combines long-term care insurance with a life insurance policy. Here’s how it generally works:
Premium Payments
You pay a set premium, which is often larger than a standard long-term care policy but guarantees your benefit.
Long-Term Care Benefits
If you need long-term care, the policy provides a daily or monthly benefit to cover those costs.
Life Insurance Component
If you don’t use the long-term care benefits, the policy pays out a death benefit to your beneficiaries.
Cash Value
Some policies may have a cash value component that builds over time, which you can borrow against if needed.
The main advantage of a hybrid policy is the “use it or lose it” aspect of traditional long-term care insurance is mitigated. If you don’t need long-term care, your premiums aren’t ‘wasted’ because they go toward the life insurance benefits.
Based on your specific needs and situation, we have access to many Long Term Care insurance providors. We will show you Hybrid and stand alone contracts along with pros and cons of each strategy.
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Schedule a consultation with our Denver financial advisors today. Let’s discuss your goals and create a personalized financial plan tailored to your needs.