Question: I have been considering Long Term Care Insurance (LTCI), and would like to know what you recommend?

Answer: Long Term Care Insurance (LTCI) can be a useful tool to help pay for healthcare services you may need in the future, but not for everyone.

As a Geriatric Care Manager, I can work with individuals who already have LTCI and want to begin using it to help pay for their care. I can also help evaluate whether LTCI is a useful purchase for you.

It is important to understand how LTCI protects you and helps pay for care. LTCI usually reimburses you for care you have already paid for. It does not usually pay for ALL your care. The LTCI plan will pay for as much care as your individual policy was set up to pay (usually a set dollar amount per day or month). If your care costs more than that benefit amount, you will pay the difference. If the care costs less than that benefit amount, you are reimbursed up to the amount you paid.

The type of LTCI policy you purchase greatly impacts the premiums you will pay. The larger and more generous the policy, the larger the more expensive premiums you may pay. Premiums can be very expensive ($400 per month or more). The cost of your premium is impacted by several variables, but one of the biggest is your age when you first purchase the policy. LTCI is definitely something to think about buying when you are younger, which makes the premiums a little lower. The older you are the higher the premiums.

The goal when buying these policies is to help pay for care, and to protect your assets. A good LTCI policy will help you pay for care without requiring you to use your life savings to pay for the monthly premiums. If paying the premiums leaves you short on money to pay your other bills, you aren’t doing yourself any favors.

When reviewing types of policies, the most common cover homecare services, assisted living facility care and care in a skilled nursing facility. I highly recommend you have a policy that works in all settings. You don’t know where your care is going to happen when you get to this stage of your life. A good policy will help to cover the cost of care wherever you end up.

Your LTCI policy benefit should be large enough to pay for most of the care you need. If you have a policy that is $200 per day and you live in a skilled nursing facility that costs $395 per day, you will have to pay the $195 difference. That saves you half, but still costs you a significant amount of money each month.

A policy that pays $350 per day, when your care only costs $196, means the excess daily amount stays in your policy to be used for a longer period of time.

There are many new types of LTCI policies coming out all the time. One of the types of policies I like the best included both a long-term care benefit along with a Life Insurance benefit. If you didn’t use up the benefit amount when paying for long term care, the policy balance would be paid out as a Life Insurance claim after your death. That is a payout either way.

I believe LTCI can be a useful tool as you age. It is important to understand you will probably pay the premiums for 15 or 20 years or more before you begin to receive benefits. So, trying to purchase this type of policy when you are over 60 years of age may be VERY premium price prohibitive. It may even be hard to find an insurance company that would sell a LTCI policy to someone over 60 years of age.

In reviewing this type of coverage, I would recommend getting one or more quotes for LTCI policies, then review the policies and the options comparing the two policies. As a Geriatric Care Manager, I can help you evaluate and compare each policy, explain how they work and how they may protect you. We can also evaluate your need to have LTCI. Not everyone needs LTCI.

I have helped people use LTCI to pay for their care. I have seen more people “save” the LTCI for someday and never actually get out what they paid in premiums or get reimbursed for care because they didn’t file a claim with the LTCI prior to their death. Much like auto insurance and homeowner insurance coverage, not everyone files a claim. But with LTCI the premiums usually cost a lot more and may or may not be a good investment for you.

Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To reach her, please email editorial@post-journal.com.