Long Term Care Insurance (LTC) Why Would I Ever Need LTC?
What is Long Term Care Insurance (LTC)? Long term care insurance pays for services required if a person is unable to care for himself/herself due to injury, chronic illness, or disability. It is a “RISK” insurance. Just like car insurance – you buy it and hope you never need to make a claim!
What is Long Term Care Insurance (LTC)? Coverage includes: • Skilled services, Intermediate Services, and Custodial Services Provided through: • Home Health Care, Adult Day Care, and Nursing Home Care
Purpose of LTC • You may need LTC if you can no longer perform “activities of daily living”(ADLs) by yourself. • Eating • Dressing • Bathing • Continence • Toileting • Transferring Typically, a policy will pay benefits when you can no longer perform a certain number of ADLs, such as three of the six or two of the six.
Purpose of LTC • Other Reasons: • Doctor’s Certification of Medical Necessity • Cognitive Impairment (Alzheimer’s) • Prior Hospitalization
Myths about LTC • “I’m too young” • “My family will take care of me” • “Medicare and Medicaid will cover my bills” • “I can save enough on my own” • “LTC insurance is too expensive”
Test Your LTC Knowledge 88% of people who receive LTC receive care at home or in an adult day care center. 12% receive care in a facility. 1. Most long term care is provided in a nursing home. False 2. Nearly 40% of the LTC population is under the age of 65. 40% of people receiving LTC are working-age adults aged 18-65. True 3. The average length of stay in a nursing home is more than five years. Most nursing home stays are short, recuperative stays. 10% of the nursing home population faces a stay of five years or more. False
Test Your LTC Knowledge 4. Nursing home expenses are covered by Medicare. False Medicare provides reimbursement for skilled care but pays nothing for custodial care. 5. People have to spend all or almost all of their assets to receive Medicaid benefits. You can’t OWN anything and be eligible for Medicaid. True 6. On average, a one-year stay in a nursing home costs about $25,000. Depending on where you live the average costs for nursing home care will be between $50,000 and $80,000 per year. False
Longevity – A two-edged sword!! Life expectancy for women = 86 Life expectancy for men = 82 Most Utahans live another 2.5 years beyond the national average. Living longer makes it more likely that you or your spouse will, at some point, need services that could be paid for by long term care insurance.
What Does LTC Cost? • Nursing home care is expensive • National average for a semi-private room $52,000 Annually* *Varies depending on where you live (SLC = $40,800)
What Does LTC Cost? • Home health care is expensive • National average $20,000 Annually* $18/hr, 5 hrs per day, 5 days a week *Varies depending on where you live (SLC = $22,100)
Projected Future Costs of LTC $176,090 $108,104 $66,367 $52,000 Based on national average figures. Varies depending on where you live.
Who Pays for LTC? More often than not~ YOU DO!!!
Premiums Just like car insurance, you pay the premiums for a lifetime, unless you choose to cancel the policy. Premiums are based on age - - so the younger you are when you sign up for coverage the less expensive the premium will be.
Premiums If you plan to sign up for long term care insurance it is best to do so around age 45.
Planning for LTC needs • Family medical history • Financial ability to pay for LTC needs • Individual circumstances (family support) As you plan for the future, you should consider:
Options • Do nothing (Risk) • May not have a need • Could go broke during your later years • End up with Medicaid in control of your life • Rely on your children • Save enough to fund your own long term care costs • Purchase some form of long term care insurance to protect your assets and provide more choices for receiving care
Plan Comparison Options • Benefit period • 3 years, 5 years, 7 years, unlimited • Length of waiting period • 90 days, 6 months, 1 year • Coverage • Home Health, Adult Day Care, Nursing Home • Respite Care, Hospice Benefit
Plan Comparison Options • Eligibility Triggers • Activities of Daily Living (how many?) • Alzheimer’s • Amount of daily benefit ($100, $150, etc.) • Waiver of premium • Non-forfeiture provisions
Plan Comparison Options • Return of premium benefit • Inflation factor • Care management benefit • Grace period • Payment options • Cost
MetLife LTC Insurance Available to: • BYU Employee, Spouse, Parents, Parents-in-law, Grandparents • Must be under age 75 at time of application • Meet underwriting requirements • Health questionnaire • Guaranteed enrollment for new employees Premium is based on age at the time of enrollment.Available through payroll deduction.
MetLife LTC Insurance MetLife packets obtained by calling 1-800-438-6388, or at www.dmba.com.
Representations made in this presentation are for educational purposes and should not replace individual, personal research and plan comparisons.