What is long-term care?

70% of people over the age of 65 will need long-term care. Whether you’re part of that 70% or not you will know someone who needs care. So, what is long-term care? Some people believe long-term care is synonymous with nursing home care which is simply not the case. Long -Term Care becomes necessary when you or I can no longer take complete care of ourselves on our own. Most of us will get to a point when we may need a little help with our daily life. That help and care can be different for everyone. Maybe you just need help getting in and out of bed, perhaps dressing has become a bit of a problem, preparing meals is perhaps becoming more difficult.

Long-Term Care St Clair Shores Grosse Pointe Mi

Long-Term Care Options

  • Legacy Long Term Care This type of LTC policy is probably what most people are familiar with. They provide great benefits when you need the care. Sadly they have a couple of flaws you may have heard about. As you age the premiums can and generally will increase. If you cancel or pass away with the policy there are no options to recapture the premiums
  • Asset Based Long-Term CareAsset Based Long Term Care answered the two major problems associated with the Legacy style of long-term care. These products can be funded in a single lump sum, paid annually or monthly. They offer the same protections but after a few years you decide you no longer want the insurance you can recapture most if not all of your paid premium. The premium on these products never increase and if you pass away while holding the policy they pay a tax-free death benefit to your beneficiary. 
  • AnnuityThere are a small number of annuities that offer true long-term care. They work similar to and ABLTC policy. They are funded with a single lump-sum and will generally double or triple your starting value for LTC use. If you pass away with this policy your beneficiaries will receive the full account value but they will be taxed on any gain.
  • Life Insurance with Long Term Care Rider — These policies are for folks whose primary concern is life insurance but also want some LTC protections. Generally these policies allow you to access around 2% of your life insurance death benefit monthly if you qualify for LTC. On the upside this strategy is one of the cheaper ways to protect against long-term care but on the downside it will eat away at your life insurance.  

The Benefits of Long-Term Care

long-term care offers a few special benefits to their owner

Flexible Care

Care will be provided where you require it and where you’re most comfortable.

Access to Care When Needed

70% of people over the age of 65 will need long-term care.

How does long-term care work?

Your Long-Term Care insurance policy will activate when you cannot perform 2 of 6 activities of daily living or are diagnosed with a cognitive impairment. Those activities are bathing, dressing, toileting the ability to get on and off the toilet, transferring which is moving from one position or place to another, eating, and continence. If you cannot perform 2 of these daily functions you’re policy will kick in and you or your representative can take the necessary steps in  protecting you and to deliver the long-term care you require. Most importantly the care will be provided where you require it and where you’re most comfortable.

Long-Term Care FAQ

common questions we get asked about long-term care.

Often long-term care policies are purchased well before you will need to access your benefits. Many of our clients have asked about how their benefit will keep up with inflation and the rising cost of care. Most of our suite of long-term care options offer inflation protection. The benefit will increase every year while you’re healthy. So when you need the benefits the most they will be ready to meet your current needs.

Premiums can increase in standard long-term care policies. In an asset-based policy premiums are fixed at the time the policy issues. 

I am often asked what the best age to get into a long-term care policy. The answer is really anytime you feel like you’re ready. And because you’re reading this it looks like you’re already well on your way. Generally, when you’re younger there can be a significant cost savings and your benefits can increase dramatically by the time you will need care. But there are Long-Term Care solutions for folks into their 80’s. The good news is no matter your age we can find you a long-term care solution that will fit your current needs. Don’t be afraid to reach out and we can find a plan for you.

A lot of our clients put off or completely avoided getting any type of long-term care coverage because of certain health problems.  No one likes rejection. The good news about most long-term care programs is the simplified underwriting. This means that most policies will issue without any blood draws or other invasive tests or physicals. Qualifying generally involves a questionnaire, a phone interview, and a medication check. Cancer is not a disqualifier and there are options for folks with diabetes. Don’t delay any further. Give us a call to schedule a consultation. We can find a plan to fit your personal needs.

One of the biggest concerns with your typical long-term care policies is it works a lot like car insurance. You can pay into it, but you won’t see any type of return until you have an accident or in this case a qualifying long-term care event. With an Asset-Based policy if you pass away without using the benefit your beneficiaries will receive at the very least everything you put into the policy as a tax-free life insurance death benefit.

This really depends on the type of policy you choose but one of the primary reasons to own a long-term care policy is to maintain control of how you are cared for. Long-Term Care insurance will pay for your stay in a nursing facility, but the fact is only 3% of policies end up paying for a nursing home. The real goal is to stay in your home, to bring the care to you. Have a caregiver get you out of bed and make you breakfast. You can pay to have someone to help you bathe, use the restroom and dress. The types of things most don’t want their children or spouse to have to do. You can even pay for someone to shovel your snow, do your laundry, or vacuum. These policies are built for you to design the type of care you want where you want it.

Some policies are set to reimburse you for expenses you incur due to a long-term care event. There may be restrictions around what they will pay for. Other policies offer an indemnity style payout. Once you qualify to receive benefits indemnity style policies will begin sending you checks to spend on your care however you wish. Give us a call to find out which policy works out best for you.

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