Long Term Care Insurance

Long Term Care Insurance can play a very important role in protecting your assets. Long term care insurance insures those who are forced to seek long term medical care. Long term care is often overlooked in financial planning, but is perhaps the most important aspect.

A long term care insurance plan can help you reach your financial goals while giving you a peace of mind in case of a traumatic event. Thompson-Brooks Insurance covers the entire state of Virginia, including areas such as Richmond, Arlington, Centreville, Norfolk, Lynchburg, Roanoke, and Chesterfield.

If you would like to discover your options for long term care insurance and compare plans, get your long term insurance quote now. Our agents are standing by to help you through this process.

Should I Purchase Inflation Protection on My Long Term Care Policy?

By Mark W. Brooks

It may not feel like it at times, but not everything goes up in price. Electronics and life insurance are two good examples. Long term care such as nursing home and home health care, however, is increasing at an alarming rate and is almost guaranteed to do so in the future as far as anyone can see.

With the aging population and people living longer, the demand for long term care facilities and the professionals that supply the care are going to be in high demand with short supply. Long term care, whether in an assisted living facility, nursing home, home health, or hospice care, can cost in excess of $50,000 per year in Virginia. Even modest increases over a number of years until the coverage is needed would make the cost of care staggering.

A long term care policy purchased to cover today’s cost of care will be inadequate for the future. This problem can be solved by adding a rider to the policy which provides inflation protection. The rider increases policy benefits each year to keep up with the ever-increasing cost of care. The younger you are, the more important it is to have such a protection since it may be many years down the road until the coverage is used.

There are a few things of inflation protection worth examining:

  • Compound Inflation – This rider increases the benefit by a certain percentage each year on compound basis. In other words, the amount of increase is greater each year since the percentage is applied to a higher base rate.
  • Simple Inflation – This rider increases the benefit by a percentage each year on an equal basis. The amount of increase is the same each year. This option is less expensive than compound and may be sufficient for someone who is elderly, whereby inflation would not have so many years to wreck havoc on the cost of care.
  • Option to Purchase – This does not increase the benefit at all on an automatic basis; it simply gives the insured the right to purchase an increased amount of coverage without proving insurability.

Long term care is the most often over-looked component of a solid financial plan.

The Importance of Long Term Care Insurance

By Brandon Brooks

Have you ever asked yourself about long term care insurance? Maybe you have heard of the term, but have not fully understood what it meant and how it could serve an importance purpose in your life.

As working individuals, we hope to save our hard-earned income throughout our lives so we can enjoy a laid-back lifestyle during retirement. However, many unforeseen dangers can arise and strike our families at any given time. If something happens where you or your spouse is forced to live in a long term medical care facility, the money saved will disappear quickly and could potentially wipe out what was left to care for your family. Studies show that 2 of every 5 Americans over age 65 will enter a nursing home during the remainder of their life (A.D. Banker). Virginia long term care insurance will protect these assets, leaving your family protected if you need permanent medical care. Some states, such as Virginia, even demand all policies must provide inflation protection, which only further benefits you.

Virginia long term care policies have many options for coverage. The policies must offer care for a skilled nursing facility, an intermediate care facility, and a custodial care facility. Some insurance companies in Virginia will offer additional optional coverage. This includes home health care, which consists of home convalescent care and residential care. Home convalescent care is health care that is provided in the insured’s home. The insured’s physician sets a recovery program that must be followed by the patient. Residential care provides living accommodations within a long term care facility, but tends to be much more expensive. Other optional coverages include hospice care, adult day care, and respite care.

Because of the nice benefits and coverage long term care insurance provides, steep price tags are usually associated with the policies. However, premiums can be reduced by increasing the elimination period and benefit period. Most benefit periods hover between two and five years, but policies can be written for the life of the insured. Obviously, lifetime benefits will result in a higher monthly premium. The length of the benefit period is chosen based on what you feel comfortable with and what you can afford. In Virginia, benefit periods cannot be less than 12 months, but this can vary among states.

As costs of medical care continue to increase, the holding of a long term care policy becomes more important. According to a study by the US Department of Health and Human services, the average cost of a semiprivate room in a skilled nursing facility is around $66,000 a year. Medicare covers skilled nursing facility care for approximately 3 months, so the bills can build quickly. If you have a valuable collection of assets you wish to leave for your family, you should consider checking into a Virginia long term care policy to prevent your money from being sucked down the drain. It would be a shame to gamble away your savings accumulated throughout your life by not being insured with long term care.

General Long Term Care Insurance Information

While many of us have now heard of Long Term Care Insurance, we may be still wondering if we really need it. We work all of our lives trying to build financial stability, which we hope will carry us into our retirement years.

Once we retire, we look forward to many years of comfort and relaxation. Unfortunately, it doesn’t always work out as we planned. More often than not, some type of illness strikes and we are facing the possibility of not only being cared for, but in many cases, the probability of losing everything we have ever worked for. There is a way to be prepared, and that is by making sure we have a program in place which will absorb the financial burden, and give us peace of mind, while knowing that we can be cared for in a manner that we choose. And, in most cases today, we can be cared for right where we feel the most comfortable, in the privacy of our own home.

Knowing the facts is the first step to being prepared. Consider that:

  1. About 9 Million Americans age 65 or older will need Long Term Care services this year.
  2. Being cared for is extremely expensive. Based on the 2007 national average, it will cost over $66,000 per year for a semi-private room in a nursing facility.
  3. Someone age 65, on average, will need some long term care for at least three years. About one-third of today’s 65 year-olds may never need long term care while 20 percent of todays 65 year-olds will need long term care for more than five years.
  4. Consider this: 56% of adults in the United States are saying that they couldn’t pay their bills or meet their basic expenses if they became disabled.

Long Term Care policies can be tailored to meet your needs as well as your budget. For example, Long Term Care Policies are available for periods of coverage including 2, 3, 5, & 8 year periods as well as lifetime.

Various elimination periods are available such as 30 Days, 60 Days and 90 Days. In most cases, people can be cared for at home with First Day coverage. The home benefits go directly to your elimination period, which means that you can purchase a longer elimination period for the nursing facility portion (which will keep your costs down) and receive first day coverage, if you ever have to enter a nursing facility.

Of course, we all want to think that we never will need this magnitude of health-care, but unfortunately, the reality of our needing the care outweighs our not needing the care. We need to ask ourselves this question. Am I willing to gamble my life savings, my quality of life as well as the quality of life of my loved ones, or do I want to have the peace of mind that a Long Term Care Plan can give to me and to my family?

Most of us have taken steps to protect our financial future. Remember that a sound financial plan should also address the possible need of Long Term Care.

  1. U.S. Department of Health and Human Services, National Clearing House for Long Term Care Information (www.longtermcare.gov)
  2. U.S. Department of Health and Human Services, National Clearinghouse for Long term Care, (www.longtermcare.gov)
  3. NAIC National Consumer Survey, International Communications Research. February 28,2007