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Trends in LTC Insurance Policies

The Long Term Care Insurance market has changed significantly in recent years. Buyers are getting younger. Insurance carriers are introducing new benefits and policy features to meet the different needs of today’s buyers. Some of these new policy features include:

Alternate Plan of Care:
A mechanism to pay for future services not listed in the policy. Called by various names depending on carrier. Benefit may be for the lifetime maximum or as little as 30 days. Be sure to read policy thoroughly.

Calendar Day vs. Service Day:
Each day you incur qualified expenses is counted as a service day. A calendar day is counted beginning with the day of eligibility – no services necessarily be incurred. Variations exist.

Care Coordination Benefit:
Assistance of an independent care manager to assist in dealing with LTC issues. Services include counseling, education and private oversight of the quality of care.

Claims Offset:
Inflation protection options affect both the daily/monthly benefit and the ‘pot of money’. With some carriers, the pot of money is reduced by claims paid. This is called claims offset and results in less money to pay out for future claims. Policies with no claim offset actually provide a greater amount benefits.

Daily vs. Monthly Benefits:
Benefits can be paid either daily or monthly basis. Monthly benefits offers greater flexibility.

Home Health Aides - Independent vs. Certified:
Carriers may offer coverage for independent ‘aides’ that are not through a licensed agency. Some carriers however, require that the aide be state ‘certified’

Indemnity vs. reimbursement:
A reimbursement type policy pays for incurred qualified LTC expenses up to the selected benefit level. Indemnity based benefits, sometimes offered as a cash benefit rider, pays for the full daily/monthly benefit, once eligibility criteria are met, without regard to actual expenses incurred.

Inflation Protection:
LTC expenses are expected to triple over the next 20 years, therefore inflation protection is essential. Most companies offer 5% simple and 5% compound inflation protection.
Informal vs. Formal Caregiver:
Some policies will pay for home care benefits if a friend, or family member provide services.
International Benefits:
Coverage provided outside the US and it's territories. The percentage of the selected benefit rate and the term of coverage vary by carrier.

Restoration of Benefits:
If long-term care services are not used and Activities of Daily Living (ADL) deficiencies cease for six months, full benefits will be restored.

Return of Premium:
Offers policy holder or their beneficiaries the opportunity to recover unused premiums. Excellent option for business or trust funds.

Waiver of Home Care Elimination Period:
Newer policies offer a zero day elimination period for Home Care – may be part of policy or a rider.
For more info on any of these products or if you have other questions, please call us at 631-393-5039 or email us at info@ltcamerica.com.