GURLEY LTCI
Frequently Asked Questions
You have questions, and we have answers! Start here for our most commonly asked about topics and questions on long-term care insurance.
GURLEY LTCI
Frequently Asked Questions
You have questions, and we have answers! Start here for our most commonly asked about topics and questions on long-term care insurance.
Have questions about long-term care planning?
From understanding policy options to eligibility and coverage details,
we’re here to ensure you have the information you need to make informed decisions.
Long-term care provides assistance to you when you are no longer able to live independently. This may be the result of a chronic illness like diabetes, a disability caused by a stroke, cognitive impairment such as Alzheimer’s disease or simply growing old and becoming frail.
It encompasses a variety of services including medical care provided by medical professionals and non-medical care provided by health care aides. Long-term care assists you with activities of daily living. It also assists people who need supervision or prompting due to cognitive impairment.
Designed as custodial care, long-term care is very different from traditional healthcare or Medicare coverage which are curative or rehabilitative in design.
Almost all policies sold today are integrated plans which cover medical and non-medical services in various settings including your own home, adult day care, assisted living facilities, memory care communities and skilled nursing facilities. Many policies also cover hospice care.
Long-term care insurance policies will pay for assistance with activities of daily living. These include bathing, dressing, eating, toileting, continence and transferring. Also covered is supervision for cognitive impairment to keep you safe.
If receiving care at home, instrumental activities of daily living may also be covered. These include tasks like grocery shopping, meal preparation, light housekeeping and laundry. Care can be hands-on or standby assistance.
Most of us think of long-term care as an end-of-life issue for the elderly. The U.S. Department of Health and Human Services projects by age 65 and older 70% of us will experience a long-term care event in our remaining years. However, 43% of the 12 million Americans receiving long-term care today are between 18 and 64. The primary reason for their care is motor vehicle accidents followed by spinal injuries. The need for long-term care could arise at any time.
The cost of long-term care varies depending on the type of care you need and where you live. Today, the national median cost of non-medical home care is $33 per hour. An average of about six hours of home care per day costs $75,504 annually. The national median cost for a private room in a nursing home is $320 per day or $116,800 annually.
In the past five years, costs have increased between 5% and 10%, depending on the care venue. You can review the current cost of care and project future costs in your area using the Genworth Cost of Care Overview.
Yes and no. Long-term care is custodial care. Original Medicare, Medicare supplements and other health insurance plans are designed to pay for curative treatments or short-term skilled rehabilitation services.
Original Medicare may cover up to 100 days of long-term care if specific requirements are met, which include being admitted to a hospital and requiring skilled care daily. Claims history indicates that Medicare pays for 22 days on average.
Medicare Advantage plans have the option to cover some home safety improvements and assistance with daily activities if health-related. Few insurers have included these options, which can change annually.
Many people mistakenly think their disability insurance pays for long-term care. It does not. Disability insurance is designed to replace your income. It does not cover long-term care expenses.
There are just three funding options available to most of us: 1) self-fund expenses using your income, savings and/or liquidating your assets to pay for care, 2) purchasing private insurance or 3) qualifying for Medicaid which is government assistance.
Private charities and other government agencies, such as the Bureau of Indian Affairs and the U.S. Department of Veterans Affairs, pick up the remaining costs, but most of us cannot qualify for these funding options.
Today, private funding—income, savings, assets, insurance, and charities—pays for 28% of long-term care expenses. Public funding—Medicare, Medicaid, and other government agencies—picks up the remaining 72%. These public programs are already stretched, and this is well before the impact of aging baby boomers.
Medicaid is a state/federal welfare program funded through tax revenues. In most states Medicaid will fund long-term care in a skilled nursing facility. In some states, Medicaid will also pay for home care or care in an assisted living community. Medicaid is means-tested. To qualify financially for Medicaid, you must meet government asset and income requirements. This is not a DIY (do it yourself) project. You need to work with an elder law attorney.
Long-term care can be provided in a variety of settings. Most care is provided in your home or in a community setting such as an adult day care center. If care requirements exceed what can be accommodated in your home, you may move to a group home, an assisted living community, a memory care community or a skilled nursing facility.
If you have assets that you want to protect, you should become educated about long-term care issues and consider purchasing long-term care insurance.
We define the market for long-term care insurance using two factors: age and wealth. This insurance is available to adults between 18 and 85, depending on the product and insurance company. The ideal age to buy long-term care insurance is between 45 and 65 for two reasons: insurability and affordability. At younger ages, the premiums are less expensive, and we tend to be healthier than in later years.
If you have assets between $500,000 and $5,000,000, excluding your home, you should seriously consider purchasing long-term care insurance. In this wealth range, a long-term care event could impact your family’s wealth and standard of living.
The state of your health is the most important factor in determining if you can qualify for long-term care insurance. Long-term care insurance is underwritten based on your medical history including cognition, family health history, current health status and lifestyle. When you apply, you must be mentally fit and able to perform all activities of daily living which are defined as bathing, dressing, eating, toileting, continence and transferring. If you are in great health, do not use tobacco products, and do not take any medications, carriers will be quick to insure you because you represent minimal risk. Certain health conditions could prevent you from qualifying for long-term care insurance.
Yes. Policies sold today are portable which means you can receive benefits anywhere within the U.S. Some carriers have policies that will provide benefits for you outside the U.S.
Long-term care insurance companies offer discounts if you are married or in a committed relationship residing together. Discounts may also be available for you if you are in excellent health. Additional discounts may be available through affinity programs if you are a member of a professional association or an employee group.
Standalone products were the first long-term care insurance products in the market in 1974. These products provide long-term care benefits only. They are not combined with life insurance or an annuity.
In customizing these products for you, we create a pool of money for care expenses using the daily benefit amount (how much coverage) and the benefit period (how long it will last). For example, a $100 per day and a 10-year benefit period would create a pool of $365,000 ($100 per day X 365 days X 10 years = $365,000).
Most standalone products are tax-qualified, which means benefits paid are not taxable, and premiums may be deductible depending on how you file taxes.
Most standalone products are integrated designs, meaning they will cover your expenses in all long-term care venues: your home, adult day care center, assisted living community, nursing home and hospice.
It is this product type that offers partnership policies that provide you with additional safeguards from Medicaid resource reduction requirements. If you need care, these policies end up being the least costly insurance solution.
Life insurance and annuity-based long-term care solutions are called hybrid products. These products have contract provisions that allow withdrawals to pay for long-term care expenses. They are also referred to as linked products as the design may include an extension of benefits rider that is linked to the life insurance or annuity component. This extension rider will continue to pay for long-term care expenses after the death benefit or annuity funds are exhausted.
These are also integrated plans and cover services in all venues. Fewer options are available to customize these products. If you die never having needed care the death benefit or annuity cash value is paid to your estate or beneficiary.
It depends on the product. Standalone or pool-of-funds products are classified as guaranteed renewable. This means the insurance company may increase premiums but only on an entire class of policies, not on an individual policy.
For this to happen, the insurance company must file a business case justifying the increase with each state’s insurance commissioner in which it wants to increase rates. The increase may be approved, modified, or rejected by the insurance commissioner. If approved, every policyholder that purchased the same class of policy within the state would receive the increase.
Hybrid products are classified as non-cancellable, meaning the insurance company cannot change the rates.
Much has been written recently about filial responsibility laws, given a Pennsylvania court case that ruled a son was responsible for his mother’s $93,000 nursing home bill.
With most states struggling with budgets and how to deal with mounting Medicaid costs, some industry pundits speculate that enforcement of filial responsibility laws may be the next strategy to shore up Medicaid budgets.
Start On Your Plan Today
Start On Your Plan Today
Every long-term care plan is unique! Find out what options are appropriate and available to meet your financial goals.