LONG TERM CARE INSURANCE FREQUENTLY ASKED QUESTIONS

1)      Should I buy LTC insurance?
2)      What is the best LTC insurance policy?
3)      If I buy a LTC insurance policy and then move to another state, will it still pay benefits?
4)      What is a Partnership policy?
5)      The inflation rider is expensive, do I really need it?
6)      Will I be able to stay out of a nursing home if I buy a LTC insurance policy?
7)      What happens if I use up all of my LTC benefits?
8)      When is the right time to purchase a LTC insurance policy?
9)      How much does LTC insurance cost?
10)    Can the insurance company increase my premium?





1) Should I buy LTC insurance?

The answer depends on your individual needs and circumstances.  If a long term care event will strain and/or deplete your retirement assets, a LTC insurance policy will be a good idea in order to preserve those assets.  Long term care can cost upwards of $100,000 per year.  A LTC insurance policy will help to relieve you of that financial strain.

2) What is the best LTC insurance policy?

What is best for one person, may not be best for another.  The benefits and amount of coverage will depend on your specific needs.

3) If I buy a LTC insurance policy and the move to another state, will it still pay benefits?

Yes.  However, the definitions in your policy may not match those in another state.  For example, if you bought a LTC insurance policy in CA, the definition of assisted living care within the policy may not accurately describe assisted living care in a different state.  In any event, it is best to contact the insurance company to be certain that you will receive benefits for the places you may wish to receive care.

4) What is a Partnership policy?

The California Partnership for Long Term Care is a program of the California Department of Health Care Services (DHCS).  Only a few insurance carriers offer Partnership policy.  All partnership policies must meet certain guidelines in addition to the guidelines already set by the state.  Partnership policies have a unique asset protection feature that allows you to retain a certain amount of assets in case you will later need to apply for Medicaid.

5) The inflation rider is expensive, do I really need it?

In general, yes.  LTC insurance policies pay a fixed dollar amount for each day of care.  Most people purchase LTC policies years before they will need care.  Without the inflation protection, your benefits will lose buying power each year.  When care is needed, you will have to pay the additional costs out of your own pocket.  Instead, it would be wise to add inflation protection to your policy to avoid having to pay higher out-of-pocket expenses in the future.

6) Will I be able to stay out of a nursing home if I buy a LTC insurance policy?

Not necessarily.  Having a LTC policy will not guarantee that you will stay out of a nursing home, especially if that is the only place capable of providing the appropriate care.  Since most people prefer to be taken care of within their own home, home care may be included with certain LTC insurance policies.  However, sometimes a nursing home is necessary depending on the severity of your condition.

7) What happens if I use up all of my LTC benefits?

It is possible to exhaust all of your LTC benefits.  If this happens, you will be responsible for the remaining expenses.  This needs to be taken into consideration when deciding on the type of policy you wish to have.  Lifetime benefits are available and will avoid the problem of exhausting your benefits.

8) When is the right time to purchase a LTC insurance policy?

This is a very individualized decision.  Many people think about this type of insurance as they become closer to retirement.  Others buy it through an employer much earlier.  Generally, premiums are much lower for people in their 40's and 50's, as opposed to others in their 60's.  In addition, as people age, they are more likely to develop a health condition that could raise their premium or render them completely uninsurable.

9) How much does LTC insurance cost?

The most important aspect should be the quality of a policy.  In addition, it is important to choose a policy with an insurance company that has a strong financial history.

10) Can the insurance company increase my premium?

Yes.  They cannot single you out and only increase your premium.  However, they reserve the right to increase the premium for an entire class of people.  In some cases, companies underestimated what these policies would cost, which resulted in a rate increase.  There are still certain companies which have never had a rate increase.