Why Tim feels you should protect yourself with Long Term Care Insurance

There is a common misconception that government programs will adequately cover your long term care needs. Medicare was not designed to cover long term care expenses - it pays for some skilled nursing facility and home health care expenses, after a brief hospitalization. In order to qualify for Medicaid, you must divest yourself of assets, which means spending down to the poverty level. Purchasing a long term care insurance policy can help protect your assets, independence, and insure the quality of you care.

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What do I need to know before purchasing a policy?

Income - Before purchasing a policy, think about your future ability to pay the premium if the company has to raise premiums for all policy holders. A good benchmark is that a premium should not exceed 7 percent of your annual income. Your income may fail to keep up with inflation as you get older, and if your spouse dies, your income might drop. You could then be faced with some tough decisions about what you can afford to continue paying.

Assets - If you have abundant assets, you may plan to pay for some or all of you long-term care costs yourself (in other words, self-insure). If your non-housing assets are low (less than the cost of a year in a nursing home) long-term care insurance is probably not a good idea. If you already qualify for Medi-Cal or would spend all your assets within a few months, you do not need long-term care insurance.

Age - Premiums are based on age. The older you are when you purchase coverage, the more expensive the premium will be. Many companies will not sell long-term care insurance policies to a person over 85 years of age. Most people begin to think about long-term care insurance when they are planning for retirement. Most people buy a policy between the ages of 65 and 80.

Health - People with serious health problems are rarely accepted for long-term care coverage. A few companies will accept you with certain chronic conditions, but your premiums are likely to be higher.

Pre-existing condition - An insurance company can refuse to pay if you need care during the first six months after you buy the policy because of a condition you had during the six months before you bought the policy. Some insurance companies will pay for care caused by a pre-existing condition if you listed it on your application and the issued you a policy. You should always be certain that the health questions on an insurance application are answered accurately.

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What options are available to me at home if I need care for an extended period of time?

Long-term care services are available in many communities. These programs try to support older people in the most independent living situation possible. These "home care" services include:

• Home health care: from a nurse or other medical personnel;
• Personal care: help with bathing, grooming and transferring from chair to bed;
• Homemaker services: housekeeping, cooking and grocery shopping;
• Hospice: support for people with terminal illnesses;
• Respite care: temporary relief to caregivers;
• Adult day health care: day care that provides some medical care, plus physical, occupational and speech therapy; and
• Special day care: for persons with special need.