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By Dave Carpenter
Associated Press
POSTED: 08:04 a.m. EDT, Sep 22, 2008
Experts recommend doing research before talking to an insurance agent about a policy.
Figure out which coverage would be the best fit by checking Web sites such as that of the National Clearinghouse for Long-Term Care Information (http://www.longtermcare.gov).
Given today's shaky environment, make sure your insurer will be around awhile by checking that it gets top financial ratings from at least two of the main insurance-ratings companies, such as A.M. Best, Moody's, Standard & Poor's, and Weiss Ratings.
Here are five things to know about long-term care insurance:
• It's not medical insurance
The biggest misunderstanding about long-term care is that many people mistakenly think their health insurance or Medicare will pay for the cost of it, said Mickey Batsell, an insurance agent from Leander, Texas, who specializes in long-term care insurance. Medicare pays only for some medically related home care and short-term stays in a nursing facility.
Long-term care insurance ''doesn't have anything to do with medical or doctors or hospitals,'' he notes. ''It basically pays for someone to do those tasks that you cannot perform yourself or that you need assistance with.'' Benefits typically start when a person can't perform at least two of the daily living activities specified in their policy, such as eating, bathing, using the toilet, transferring to and from a bed or chair, dressing and continence.
• Cost and risk increase the longer you wait
The average age at which people sign up for long-term care insurance is 61, but waiting longer will add to the cost and increase the chances of a health problem that will cause you to be rejected. Discounts for good health that can reduce the policy cost by 10 percent to 20 percent a year may be harder to qualify for.
''Your good health can obtain and lock in discounts; your bad health could cause you to pay more or be ineligible,'' said Jesse Slome, executive director of the American Association for Long-Term Care Insurance, which recommends buying it in your 50s. ''Many people wait too long to start the planning process only to discover they can't get coverage no matter how much they are willing to pay.''
Fourteen percent of applicants age 50-59 were declined coverage last year for failing their physical, compared with 23 percent of those in their 60s and 45 percent of those in their 70s.
• If you stop paying, you might lose what you paid in
Dropping coverage might cause you to lose part or all of the money you paid in, depending on the policy and insurer. That has happened to some when the insurer raised premium rates by double digits. Ask about the possibility of a non-forfeiture benefit.
• Women are much likelier to need it
Most coverage is purchased jointly on behalf of couples but more than 70 percent of nursing home residents are women and almost two-thirds of paid long-term care benefits go to women, according to the long-term care trade group. ''Women, especially those who are divorced, widowed or living alone, need to plan for the risk,'' Sloane said. They also live longer on average, which increases the likelihood of them using more.
• Some insurance is better than none
If you can't afford all you need, there are ways to make it less costly. Skipping the inflation protection or buying the right to purchase additional coverage every three years will save money. So will opting for a longer ''elimination period'' — the required time before the coverage kicks in when you have to foot the bills. ''Something is better than nothing,'' Batsell said.
Experts recommend doing research before talking to an insurance agent about a policy.
Figure out which coverage would be the best fit by checking Web sites such as that of the National Clearinghouse for Long-Term Care Information (http://www.longtermcare.gov).
Given today's shaky environment, make sure your insurer will be around awhile by checking that it gets top financial ratings from at least two of the main insurance-ratings companies, such as A.M. Best, Moody's, Standard & Poor's, and Weiss Ratings.
Here are five things to know about long-term care insurance:
• It's not medical insurance
The biggest misunderstanding about long-term care is that many people mistakenly think their health insurance or Medicare will pay for the cost of it, said Mickey Batsell, an insurance agent from Leander, Texas, who specializes in long-term care insurance. Medicare pays only for some medically related home care and short-term stays in a nursing facility.
Long-term care insurance ''doesn't have anything to do with medical or doctors or hospitals,'' he notes. ''It basically pays for someone to do those tasks that you cannot perform yourself or that you need assistance with.'' Benefits typically start when a person can't perform at least two of the daily living activities specified in their policy, such as eating, bathing, using the toilet, transferring to and from a bed or chair, dressing and continence.
• Cost and risk increase the longer you wait
The average age at which people sign up for long-term care insurance is 61, but waiting longer will add to the cost and increase the chances of a health problem that will cause you to be rejected. Discounts for good health that can reduce the policy cost by 10 percent to 20 percent a year may be harder to qualify for.
''Your good health can obtain and lock in discounts; your bad health could cause you to pay more or be ineligible,'' said Jesse Slome, executive director of the American Association for Long-Term Care Insurance, which recommends buying it in your 50s. ''Many people wait too long to start the planning process only to discover they can't get coverage no matter how much they are willing to pay.''
Fourteen percent of applicants age 50-59 were declined coverage last year for failing their physical, compared with 23 percent of those in their 60s and 45 percent of those in their 70s.
• If you stop paying, you might lose what you paid in
Dropping coverage might cause you to lose part or all of the money you paid in, depending on the policy and insurer. That has happened to some when the insurer raised premium rates by double digits. Ask about the possibility of a non-forfeiture benefit.
• Women are much likelier to need it
Most coverage is purchased jointly on behalf of couples but more than 70 percent of nursing home residents are women and almost two-thirds of paid long-term care benefits go to women, according to the long-term care trade group. ''Women, especially those who are divorced, widowed or living alone, need to plan for the risk,'' Sloane said. They also live longer on average, which increases the likelihood of them using more.
• Some insurance is better than none
If you can't afford all you need, there are ways to make it less costly. Skipping the inflation protection or buying the right to purchase additional coverage every three years will save money. So will opting for a longer ''elimination period'' — the required time before the coverage kicks in when you have to foot the bills. ''Something is better than nothing,'' Batsell said.
Comments
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Posted 06:52 PM, 09/22/2008
Great Article.There are so many ways to save on your Long-Term Care insurance premiums and dealing with the top carriers is of utmost importance. There are substantial discounts for excellent health as well as martial or partner discounts. Seek the counsel of a Long-Term Care Specialist. To get the information necessary to make an informed decision, you will need to put in many hours of research and still not have the whole picture. (www.LongTermCareInsurancePros.com) are experts and will guide you according to your needs and wishes. It is important to obtain this type of insurance when you are younger and in great health. If you love your family, you will at least get the information.
Posted 09:00 PM, 09/22/2008
Best Way To Find An Independent Long-Term Care Insurance Professional. It is definitely true that the price of long-term care insurance can vary quite dramatically from one insurer to another. For that reason, it really does pay to work with an independent professional. The American Association for Long-Term Care Insurance does not sell insurance. But we maintain the largest database of local professionals that you can easily search on our Website ( http://www.aaltci.org ). Call one and request no-obligation information about pricing and health qualification. Jesse Slome Executive Director American Association for Long-Term Care Insurance http://www.aaltci.org
Posted 12:12 PM, 09/29/2008
This article is a good one! Here's some questions to Help You Find A Great Agent:
1. What is the profile of a typical client served by your firm? The closer that your siutation matches the answer to this question, the better.
2. How many long-term care insurancepolicies do you write on a monthly basis? I think that the answer should be at least 1-2 applications per month...an agent who is regularly selling LTC insurance will keep up with new products, developments, etc.
3. Why do peoplle pick you instead of other insurance agents? Here you will learn his or her perceived strengths, and also it's a great question to test your basic compatibility and ability to work together well. Two alternate questions: How long have you been an insurannce agent? How did you decide to get into this business?
4. Will you tell me exactly why you are recommending a certain policy design, or a certain company? If the answer is no, run!
Overall, you should feel good about your insurance agent. If you feel unnecessarily rushed or intimidated, keep looking.
This advice is from Marilee Driscoll, author of "The Complete Idiot's Guide to Long-term Care Planning," and founder of Long-Term Care Planning Month.
Subscribe to a free newsletter, ask your own questions, read more advice, and FIND LOCAL HELP and GOVERNMENT LISTINGS at www.LTCmonth.com. October is LTC Planning Month. What's your long-term care plan?
(c)2008
