Long Term Health Care

5 Things To Look For:

1) Good Financial Stability:

A company with an A.M. Best rating of A or A+ is the best choice. This rating is determined by financial reserves and how many higher risk people are let into the pool. The tightest company in underwriting is going to be able to offer the best plan at the most reasonable price. Obtaining insurance from a company with an A or A+ rating may not be possible if your health is poor. The younger and healthier you are, the better--and the lower the premium monthly and the less you will pay over your lifetime. But even if you already have health conditions, investigate with a specialist to see if there is a solution for you, too.

Barbara suggested that you may want to shop around even if you have a group long term health plan at work, as many group plans do not provide a long term care specialist to help design the plan for your personal needs. Group underwriting may be easier for employees with severe health issues. Check the market first and design the best plan for your needs. You may still be able to sign up with the group if other carriers cannot insure your health conditions.

2) Longevity of the Company

How long the company has been in business is an important factor. They should have some good claims paying experience seven to ten years after many people have purchased plans. As the boomer generation gets older and more of us use the benefits from these plans, the insurance companies will adapt their policies and prices and underwriting as they gain more experience. Be wary of a long term health insurance company which has only been in business a few years. They simply aren't going to have the experience.

3) Good Record of Claims Payment

This is actually a difficult thing to find out. It's up to each state's department of insurance to obtain and publish this information. A long term health care insurance specialist should be able to find out whatever information is available.

4) Work with a Specialist

Long term health care insurance is complicated. Actually, most insurance policies are complicated, and this one is no exception. For example, Barbara let me know that I should look for expenses to be paid monthly by the policy, not daily. Some days of care are simply more expensive than other days, so it's best if the money can be paid out based on a month of expenses. She also suggested that I look to see if there is a requirement for an agency to perform home care services. Agencies can cost more per hour and may require a four-hour minimum to come to your home. If a neighbor can drop in now and again to help out, wouldn't it be nice if the insurance policy covered their cost?

Barbara also says she may not recommend long term health care insurance for married couples with less than $100,000 in savings outside their home and who have low income. The spouse needing care may be eligible to go to a nursing home immediately on MediCal (Medicaid), with the house and savings remaining in the name of the at-home spouse. Singles would need to spend down to $2000 in assets and their house could have a lien to repay any MediCal paid nursing home costs after their death. A federal budget law passed in February 2006 makes any value in the home above $500,000 subject to spend down before MediCal (Medicaid) eligibility. This requirement will be worked out state by state.

The key is, can you afford the insurance today without impacting your lifestyle? Would using some of the interest on your savings to pay for long term care insurance in retirement be a better way to protect all your savings and choices?

As one of Barbara's clients exclaimed when asked why she had bought long term care insurance, "I want to be independent-to the end!"

Resources

If you need more assistance discussing your long-term health care issues, feel free to contact Barbara Hanson at bhbarbarahansonltci.com or 831-335-4949. Her website is www.barbarahansonltci.com.

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