Long-Term Care
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Since 1970 we have designed, critiqued, and brokered Long-Term Care Insurance. We research and bring to you the highest rated plans for Long-Term Care Insurance in Ohio. With over 60 years of combined experience, we can provide knowledge and insight that can only be gained through experience in this market.

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Long-Term Care:

LTC Policy Functions

When you are chronically ill needing care, the functions of a long-term care insurance policy are generally:
  • What triggers benefits?
  • When do benefits begin?
  • How are benefits paid?
  • How much is paid?
  • How long are benefits paid?

Let’s take a look at each one and explain some basic functions of today’s long-term care insurance policies.

1. What triggers benefits?

What triggers benefits?

Most insurance policies sold today for LTC are known as tax-qualified. These plans require you to be “chronically ill” in order to receive benefits. Chronic Illness was defined by legislation as “loss of 2 activities of daily living expected to exceed 90 days or severe cognitive impairment requiring substantial supervision”.

2. When do benefits begin?

When do benefits begin?

Benefits begin after the stated elimination period in the policy. The elimination period is the number of days before the policy starts paying for care. Most plans only count service days, or the days you need care towards the elimination period.

Others may count calendar days, or all the days since your licensed health care practitioner certified you as chronically ill.

3. How are benefits paid?

How are benefits paid?

Most policies are reimbursement of qualified expenses from licensed providers of home care, assisted living facilities and nursing homes. You submit claim forms, along with expenses and are reimbursed for your care costs.

There are policies available that provide cash long-term care coverage. These policies pay you a cash benefit when you are certified as chronically ill. There is no need to submit bills or claim forms. You pay whomever you wish to care for you. These policies are more expensive than reimbursement LTC insurance policies

4. How much is paid?

Increasing LTC Costs

How much is paid from your policy depends on the type of plan you purchased, along with your benefit amount.

The maximum benefit of a tax qualified long-term care reimbursement insurance policy is usually described as a “pool of money”. This is determined by how much daily or monthly benefit is purchased multiplied by the benefit period. For example, if you bought $4,500 per month on a 4 year plan, the insurance company may multiply $4,500 x 48 months and your initial pool of money would be $216,000.00. They would initially pay for care up to $4,500 per month until the $216,000 is exhausted, even if it lasted longer than 48 months.

The cash plans pay the stated daily or monthly benefit regardless of the cost of care. They pay a stated benefit for a stated period of time.

Your Plan May have included Inflation:

Inflation Protection – riders that allow your insurance protection to grow over time and maintain its integrity until you need it.

Types of inflation:

  • 5% Compounding – grows the daily or monthly benefit and the maximum benefit at 5% compounding, forever, benefits will double every 15 years
  • 3% Compounding – grows the daily or monthly benefit and the maximum benefit at 3% compounding, forever, benefits will double every 23 years.
  • 5% Simple - grows the daily or monthly benefit and the maximum benefit at 5% of the original amount, forever, benefits will double every 20 years.
  • CPI - Each year, your Daily/Monthly Benefit and Total Pool of Money will be adjusted on a compounded basis, according to increases in the Consumer Price Index (CPI). The potential amount of your annual CPI increase is unlimited, even during periods of the highest inflation. In the event that the CPI decreases, your benefit amount will not be reduce
  • Future or Guaranteed Purchase Options – the ability to purchase additional benefits every few years, regardless of health, at your new age. This offer may be restricted if you have denied other offers in the past.

5. How long are benefits paid?

How long are benefits paid?

Each policy will have a stated maximum benefit or time period on the face page.

  • Pool of money reimbursement plans - will pay up to the maximum policy benefit stated, even if it stretches beyond the initial time period.
  • Cash or indemnity plans - pay until a stated time period has elapsed.