Long-Term Care Insurance Considerations

Long-Term Care Insurance Considerations

All of my posts up to this point in time have been written by me based upon my research of law or actual cases. This post deals with questions posed to a long-term care insurance expert, Geoffrey S. Close, a Wealth Advisor with Morgan Stanley of Morristown, New Jersey. I have worked closely with Mr. Close on several matters and I am sure you will find this information valuable in both your Medicaid and long-term care activities.

1. Are there different types of long-term care insurance?

There are two types of long-term care insurance – pay-as-you-go and a single premium with refund.

2. Does long-term care insurance cost less than double for a married couple?

Yes, the married could pay less than double a single person.

3. What are the options under long-term care insurance?

Options relate to home care, institutional care, elimination time periods (deferral of coverage), inflation riders, etc.

4. Does the new law make long-term care insurance more significant?

Yes, mainly because of the 60 month look-back.

5. Explain the need for home care to be covered under long-term care insurance.

Many people will elect to remain in their homes with custodial care. Medicaid does not pay for long-term care at home.

6. Why should somebody pay for increased coverage due to the C.P.I.?

The increasing costs of nursing homes render a C.P.I. adjustment advisable.

7. Explain what “rated” long-term care insurance means.

Rated means increased costs due to a condition such as dementia or reduced mobility.

8. Explain the need for long-term care insurance for someone with little money and someone with significant money.

A person with little money may not need it because he will qualify for Medicaid. A person with significant money may want to preserve his estate if they go in a nursing home.

9. Is there a best age for purchasing long-term care insurance?

The earlier the start, the total overall out-of-pocket costs are less.

10. Do you recommend coordinating your long-term care insurance proposal with an elder law attorney if the family has one?

Absolutely, a family should coordinate their long-term care plans with an elder law attorney.

11. If a family’s income increases, is there a procedure for increasing their long-term care insurance?

You can always increase your long-term care insurance, but the age and medical status at the time of increase will be considered.

12. If one spouse is either uninsurable or highly rated and a second spouse is in excellent health, how is this situation resolved for cost purposes?

The rated costs for the unhealthy spouse can be ameliorated if there is a healthy spouse with a simultaneous application.

13. Is there a situation in which a person is not a long-term care insurance candidate?

If a person has limited means where his/her assets would be exhausted within a year and, thus, qualify for governmental assistance and the cost of the premium would be a burden, then long-term care insurance is really not an option.

14. Do you recommend long-term care insurance for the look-back period or a person’s lifetime?

As with question 10, it is recommended that the family coordinate their long-term planning with an elder law attorney to look at the cost benefit analysis of many courses of action. Having long-term care insurance gives the opportunity to pursue multiple planning options.


Disclaimer: This article does not constitute legal advice and each person may have unique facts for which legal consultation may be necessary.

© September 2009, Post 104