There are many kinds of Long Term Care Insurance Policies. The common ones are “Indemnity” or “Expense Incurred” policies. You choose the benefit amount when you buy an expense incurred policy. An “indemnity” or “per diem” policy pays up to a fixed benefit amount regardless of what you spend. You are reimbursed for the actual expenses for services received up to a fixed dollar amount per day, week, or month with an “indemnity” or “per diem” policy.

“Integrated Policies” or policies with “Pooled Benefits” offer a total dollar amount which may be used for different kinds of long term care services. Usually there is a daily, weekly, or monthly dollar limit for long term care expenses covered by the policy. Let’s say for example you buy a policy with a maximum benefit amount of $300,000 of pooled benefits. With this policy you will have a maximum daily benefit of $300 that would last for 1,000 days if you spend the maximum daily amount on care. You will receive benefits for more than 1,000 days if your care costs less than the maximum daily amount of $300.

There are three broad categories of LTCI policies based on where benefits are paid - Home Care Only, Nursing Home and Residential Care Facility Only and Comprehensive. Care received in your own home or a community setting is possible only with Home Care Only policies. Home health, adult day health care, hospice, respite care, personal care and homemaker services costs are coved by these kinds of policies.

Assisted living care provided in nursing home or any place that provides assisted living care as long as this place is licensed as a Residential Care Facility for the Elderly (RCFE) is covered by Nursing Home and Residential Care Facility Only policies. Room and board in these facilities are not the only services covered by these kinds of policies. Expenses of all long term care services you receive in either of these facilities is covered by this policy up to the policy’s maximum daily benefit amount.

Care for patients with cognitive impairment (dementia) from Alzheimer is provided in small neighborhood homes also called board and care facilities, retirement homes and specialized community facilities which are part of the RCFE. This kind of policy provides for assisted living benefits equallingl to atleast 70% of the nursing home care benefit.

Expenses rising out of care in a nursing home, assisted living facility, home care and community care (adult day care) are covered by Comprehensive Long Term Care Insurance Policies. Before benefits can be paid LTC Comprehensive policies sold by different companies require different criteria to be met. When two activities of daily living (such as bathing, using the bathroom, dressing eating etc.) can not be performed or you have a cognitive condition that requires supervision, Comprehensive Long Term Care Insurance Policiy will pay you the benefits. The criteria required for the benefits remain as described above whether care is provided in a nursing home, at your own home or in an assisted living facility.

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Your Long Term Care Insurance Policy Premiums are influenced by the type of policy chosen, daily benefit amount to be paid, your age, number of years the policy will pay benefits, choice of inflation protection and the number of days after you qualify for the benefits before the company will start to pay benefits. Few companies will insure you for a higher premium if you have a pre-existing condition. Your LTCI policy premium is influenced by the combination of all the above factors.

Different LTCI companies calculate differently the cost of benefits you choose. This reason can result in significant differences between premiums for similar benefits. For example a company may calculate the premium based on every $10 of the daily benefit you choose. The premium would be $950 per year for a daily benefit of $100, if the company charged $95 for each $10 of daily benefit. With another company the annual premium would rise to $1,500 for a similar package of benefits with a cost of $150.

The method and amount of inflation protection chosen will also influence your LTCI premium. For those in their 40s and 50s not expecting to need care for several years this nearly doubles their cost. Your probability of developing health conditions which make you ineligible to apply for new benefits increases with age but your ability to change LTCI policy diminishes as you age.

You may see an increase in your LTCI premiums over the years. A personal worksheet which explains the rate increases the company has had since 1990 is provided to you by your agent when you buy a LTCI policy. For rate increases for every company that sells go to the California Department of Insurance website. LTC insurance companies found it difficult to increase future premiums when California passed legislation in 2000.

It became mandatory in 2006 for companies filing for premium increases over a certain amount to offer their policy holders the choice of stop paying their premium and keep the benefits equal to the total amount of premiums already paid. Only a small amount of care will be financed by the total amount of premiums you have already paid. You will not lose all your benefits just because of a premium increase you were unable to pay.

Lower premiums can be negotiated with your company by reducing some of your policy benefits. If you need to lower your premium or you have received a premium increase notice contact your local Health Insurance Counseling and Advocacy Program (HICAP) office.

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Costs rising out of long term care services are paid by Long Term Care Insurance. Help needed to carry out daily activities like eating, bathing, dressing and using the bathroom etc. when you have a physical disability or cognitive impairment such as dementia caused by Alzheimer’s disease is called Long Term Care. Traditional health insurance, Medicare or Medicaid do not pay for such care. This kind of care is not received in a hospital nor is it intended to cure you. You may need this kind of care for the rest of your life and can receive it in your own home, a nursing home or assisted living facilities.

Health services for those who are 65 or older is provided by Medicare which is a Federal Health Insurance program. Those who are under 65 but have certain disabilities, and those dealing with end stage renal disease requiring dialysis or a transplant are also covered by Medicare. Those suffering from ALS or Lou Gehrig’s disease are also eligible for Medicare. Only specific short term skilled care such as inpatient hospital stays, inpatient skilled nursing facility stays, hospice care and home health care are paid by Medicare. It also pays for some out patient medical services such as doctor visits, diagnostic tests, preventive care and prescription drugs. For a limited time only specialized care in a hospital is provided by Medicare.

A state based program supplemented by Federal Funds is called Medicaid. Medi-Cal is the Medicaid Program in California. According to your state’s guidelines Medicaid aims to provide health care services to people with low-income and asset levels. You must meet your state’s poverty criteria in order to be eligible for Medicaid. It generally means you need to expend all but $2000 of your assets. A welfare program kicking in only after a person’s assets are gone is Medicaid!

A form of private supplemental health insurance policy which increases the amount of health insurance for eligible Medicare recipients is called Medigap. Private health insurance companies such as Humana, Blue Cross and Blue Shield etc. provide Medigap insurance. Regardless of which private company sells it to you the 12 standardized Medigap Policies have the same benefits. Medigap policies pay a part or all of Medicare’s coinsurance and deductibles. Some health care costs which are not covered by Medicare like emergency medical care in foreign countries are covered by Medigap.

In summary, Long Term Care costs are covered only by Long Term Care Insurance. To protect your assets and to safe guard yourself and your family in the event you need long term care, seek Long Term Care Insurance.

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Between 1946 and 1964 children born in the US are known as the Baby Boom Generation. 28% of the population is represented by the 76 million baby boomers. 40% of this generation will celebrate their 90 birthday. Some kind of Long Term Care Services at some point in their lives will be needed by 70% of people over the age of 65.

When this generation reaches retirement at 2030 the elderly population will be double what it is today. The oldest baby boomer will turn 65 in 2010 and the youngest by 2030. The youngest baby boomer turns 85 by 2050 when the need for long term care is felt the most. 30% of Baby Boomers believe that they have long term care coverage. Unfortunately, those who can afford to purchase a policy have not done so yet.

A big portion of seniors needing long term care in the future consists of baby boomers not planning for this need today which will lead to financial drain on the government. 43% of nursing home care costs for seniors come from Medicaid. In the future Medicare and Medicaid will be taking more out of the system when fewer workers in the workforce will be contributing (tax).

Today’s life style has made informal home care a less of an option for the baby boom generation than it was for their parents. Demographic changes like smaller family size, work related mobility, increase in divorce rates and increase in people choosing to remain single have made informal home care more difficult.

Every baby boomer needs to realize the possibility of needing some kind of long term care at some point in their life. Making long term care a key component in retirement planning will lead to financial peace of mind in old age. Not being in denial that “this can never happen to me” and buying long term care insurance at an earlier age will be cheaper than later. Being realistic and not assuming that the government or family to take care of you will help you choose a long term care plan that best fits you. To not to be a burden to your family and for peace on mind in old age, choose a long term care insurance policy with the maximum coverage.

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Your current financial situation, your savings and assets and the freedom to choose the kind of long term care you want are factors to consider when you want to buy long term care insurance policy. Choose a trustworthy Long Term Care Insurance carrier with a sound rating so that it will be around when you want to receive your benefits - in 10 to 30 years. Understand the long term care insurance reviews and claims process of the company and know how many filed claims have been paid by the company.

The state in which you live and the maximum daily benefit of your Long Term Care Insurance policy influence your long term care insurance quote. Look into a Long Term Care Insurance policy with the maximum daily benefit which factors in the inflation rate in its costs and premium. Choose a long term care insurance product which allows your disability benefit keep pace with inflation. You may be left with too little money too late if you do not keep inflation rate in mind while buying Long Term Care Insurance.

Consider a Long Term Care Insurance policy with coverage when unemployed, works with your Social Security and comes with non-cancel and guaranteed renewable features. Some Long Term Care Insurance policies have an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout - either reimbursement or indemnity. Long Term Care Insurance policies allows you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Look into Long Term Care Insurance policies which allow you to receive benefits if you experience an income loss from a partial or a total disability.

Consider buying a Long Term Care Insurance policy with an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout - either reimbursement or indemnity. Some Long Term Care Insurance policies allow you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Check out Long Term Care Insurance policies that allow you to receive benefits if you experience an income loss from a partial and/or total disability.

Long Term Care Insurance with the maximum coverage allows you to choose where you want to go instead of having to go where you are taken while still maintaining your financial independence and dignity. Those Long Term Care Insurance policies with fixed premiums which stay in force as long as you pay the premiums are note worthy. Not only are your assets protected by Long Term Care Insurance, but should you overcome the need of long term care, you still have your savings to enjoy when you recover.

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