Long Term Care Insurance: Then and Now
November is Long Term Care Awareness month, so Ovation Home Care decided to talk with somebody who specializes in one aspect of long term care: LTC insurance.
Erick Cova is an insurance advisor with Mutual of Omaha in Gainesville, Florida. (If you remember Mutual of Omaha’s Wild Kingdom, then you are at least as old as me!) Erick sat down with me recently and to help me understand how LTC insurance policies work and what people need to understand both when choosing a policy and when using the benefits afforded by the policy.
LTC 101
In some ways, long term care insurance is like a term life insurance policy. You pay a premium over time and receive the benefit(s) when some future event happens. A term life policy pays out upon the death of the insured and can be used for anything. In contrast, long term care insurance benefits become available once the insured individual qualifies by needing ongoing care.
Does the phrase “long term care insurance benefits” refer to long term care facilities? Well, yes and no.
- Yes, in the sense that you can use long term care benefits for a nursing home or assisted living facility.
- No, in that benefits are not limited to use in long term care facilities.
If you desire to age in place—that is, to live in the home of your choice, whether it’s yours or a family member’s—you can use your long term care benefits. All you have to do is meet certain conditions, like needing assistance with two or more activities of daily living.
A long term care insurance policy is a function of “how much”, “how long”, and “how old.” You decide what monetary benefit you want each month—how much—and you decide the length of time you want those funds to be available—how long. (Four years is the standard length.) Monthly premiums vary from person to person, depending on your age at the time you take out the policy—how old.
Then and Now
The reason I have entitled this article Long Term Care Insurance: Then and Now, is not because I want to take a historical look at LTC insurance policies, but because there are two aspects to long term care insurance I think everyone needs to consider, regardless of your age/
When Is Your Then?
“Then” is what makes aging in place possible. “Then” represents planning. “Then” represents foresight. “Then” represents a strategy for growing old.
People who are able to age in the manner they desire are those who made the appropriate arrangements beforehand.
If you’re reading this and you already have a long term care insurance policy, you have a “then.” If you don’t, your “then” is now.
Talk to someone like Erick, who’ll show you what it takes to guarantee the level of future care you desire. A good LTC insurance agent can help you, whatever your budget.
Now What?
If you already have an LTC insurance policy, the question is, when should you start using it?
A Personal Anecdote
My mother had a policy but never used it, partly because we didn’t know she had taken out the policy and she forgot she had it. Once we all realized it was available, we had already begun the process of transitioning her from our home into an assisted living facility.
Like all LTC insurance policies, hers included an elimination period. That’s a buffer that most policies have between your desire to draw the benefits for use in an LTC facility and the time you can actually receive the benefits. Unfortunately, my mother passed away before all the paperwork was finished and the elimination period was completed.
However, it turns out she could have been using her benefits while she was living with us. Like a lot of aging seniors, she required in-home care several days a week to help her with multiple activities of daily living. That’s long term care! What I learned from Erick regarding the policies his company offers is that there is no elimination period if you want to use your benefits to age in place. That could have made a big difference with my mom.
Time for a Checkup
If you haven’t reviewed your LTC policy in several years, Erick suggested taking it in for a checkup. That is, talk with your insurance agent about it. It’s possible the benefit figures have increased since the inception of the policy. Or maybe you’re in a position to increase the amount of benefits available There’s no rule that says you can’t have multiple policies.
Is It Time For Long Term Care?
It could be that you’re reading this because your health or the health of someone you love is declining. If you’ve had a hospitalization and feel unsafe doing basic things by yourself—dressing, bathing, and so forth—you might be eligible to begin drawing your benefits. Speak with your LTC insurance agent. Or reach out to a company that provides in-home personal care services (like Ovation Home Care). We would be happy to help you explore your options and help you take the next step on your journey, whatever it is.