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Long Term Care (LTC policies):

Long Term Care

What is Long Term Care?

Long Term Care (LTC) goes beyond medical care to include all the assistance you could need if you ever have a chronic illness or disability that leaves you unable to care for yourself for an extended period of time (longer than 90 days). While older people generally require the most long-term care services, 40% of long-term care claims are paid to someone under the age of 64. A young or middle-aged person who has a debilitating illness or accident may also require care. For more information on Long Term Care watch this quick video that gives an Overview of Long Term Care

You may need Long Term Care due to:

  • Dementia/Alzheimers
  • Stroke
  • Complications with Diabetes
  • Other Chronic conditions 

Where can you receive care?

  • At home
  • Assisted living facility
  • Services in community facilities
  • Skilled nursing facilities

In order to be eligible to receive LTC benefits you must not be able to perform two of the Activities of Daily Living

In addition being cognitively impaired from dementia or Alzheimers would be a qualification to receive benefits.  

Long-Term-Care Insurance (Individual and Hybrid) Preliminary Health Screen Questionnaire - to find out what you may be able to qualify for please click the link attached and take a short health survey:

Types of Long Term Care:

Traditional Long-Term Care Insurance

With a traditional stand-alone policy, you elect your benefits at the outset:

1. Monthly benefit ($3,000-$12,000)
2. Benefit period (2-5 years, unlimited) Individual or Shared
3. Inflation protection (3-5%, compounded)
4. Waiting Period (90-180 days)

Your policy can be custom tailored to suit your needs.
Your premium is guaranteed renewable. Premiums are typically paid on a monthly, quarterly, semi-
annual or annual basis.
As long as you pay your premium, you will have coverage in-force.

Long term care insurance policies are similar to your auto insurance, homeowner’s insurance, and
health insurance. There is no cash value.

As with your auto or homeowner’s insurance, if you do not make a claim on your policy you will not
receive any benefits (actually a good thing).

Because this traditional insurance utilizes a "pay-as-you-go" approach your premium is typically
affordable and attainable.

Most importantly because traditional policies are able to be customized. You are able to design the
policies to account not only for your current needs but also to account for future inflation.

If inflation protection requirements are met, traditional policies will also offer you Medicaid
asset disregard benefits through your State Long Term Care Partnership Program.

With this traditional insurance, your premium may be subject to a rate increases.

Securities and Advisory Services offered through Cadaret, Grant & Co. Inc., an SEC Registered
Investment Advisor and member FINRA & SIPC. Balance Wealth Advisors and Cadaret, Grant & Co. Inc.
are separate entities.

Hybrid Long Term Care/Life Insurance Policies

Traditional "pay-as-you-go" policies are just one avenue for you to explore when you are considering your planning needs.

Additional planning options for you to consider are "linking" your long-term care benefits to additional insurance benefits such as a paid-up life insurance policy or an annuity, for example.

Unlike traditional policies that have a small premium "pay-as-you-go" approach, hybrid linked benefit insurance policies usually are funded with a one-time single premium up-front such as $50,000 or $100,000.

Many hybrid policies also provide you the ability to elect your long-term care insurance benefits at the outset, i.e. monthly benefit, benefit period, and inflation protection. The waiting period will be fixed by the insurance company, however, typically 90 days or less.

The appeal of hybrid long term care life insurance policies is that you are guaranteed to receive your premium back should you never need to receive long term care.

Also, premiums with hybrid LTC policies are fixed, and are guaranteed to never be increased.

Hybrid long term care policies will:
•pay for your costs should you receive care
•provide your estate a tax-free life insurance benefit should you not need care
•offer you a 100% money-back guarantee should you change your mind

For example, you may have already set aside $500,000 in your savings should you need long term care. Let's presume you are a 60-year-old female (*sample fictitious client for illustration purposes only*).  As an alternative to self-funding your needs, you could choose to move $100,000 of the $500,000 in your savings into a linked-benefit policy. In doing so you could receive:

•$500,000 of long term care benefits ($7000 month for 6 years) should you need care

•$165,000 tax-free life insurance benefit to your beneficiaries should you not need care

•$100,000 returned to you should you change your mind

Hybrid insurance policies may be worthwhile for you to consider if you have liquid assets generally not needed for retirement income that can be easily re-positioned.

Securities and Advisory Services offered through Cadaret, Grant & Co. Inc., an SEC Registered Investment Advisor and member FINRA & SIPC. Balance Wealth Advisors and Cadaret, Grant & Co. Inc. are separate entities.

Printable Version

NAIC Shoppers Guide to LTC

We custom design policies that fit for each client.  There are many variables that come into play.  Everything is a cost vs. benefit discussion.  We generally recommend looking at 2 individual plans and 2 asset based plans.

**Below is a sample of the different inputs & options that need to be discussed.  By looking at the cost differentials is is easy to figure out what options are worth it and which are not.

Michael and Liz Sample - shared LTC illustration

*sample 52 and 51 year old clients - husband and wife.  For illustration purposes only.