Elder Care Guide and Information

Underwriting is essentially the acceptance of risk in return for payment. In long term care insurance, this occurs when an applicant becomes a policyholder, paying the insurance company in accepting the risk involved that may require them to pay out claims on the applicant’s behalf. A lot of people often wonder what the underwriting process and the application process for long-term care insurance are about and how it all works. I’ll discuss all of that in this article. Why is it that underwriting is necessary? The answer to this question has to do with how insurance functions.

Think of this kind of insurance as a pool of money into which different parties and events have made deposits. These funds can then be used to pay for the financial losses of individual depositors who have had to make a claim due to unforeseen circumstances. In the case of long-term continuous care, the funds could be used to pay for custodial care for the individual policyholders who develop a need for this type of care.

The primary objective of underwriting is to spread the risk among the pool of policyholders as equitably as possible in such a manner that is also profitable for the insurance company. The premiums that each policyholder must pay are directly affected by how much money the insurance carrier expects to have to pay out for claims. This can only mean that the insurance company has to manage the risk that it will have to pay money out of that central pool of funds. The more money they have to pay out, the higher the cost of the insurance for everyone. Risk management involves analyzing the potential risks for each applicant (and the associated costs of those risks) in order to set premium rates for policyholders and mitigate the potential financial losses for the insurer.

Question is, how are long term care insurance or LTCI premiums calculated? To manage the payout risk, each insurance carrier employs underwriting procedures to make sure that applicants with high-risk medical histories are not allowed into the insurance pool, which would thereby drive up the cost for everyone else. Obviously, while the risk taken by the insurer directly informs the premium rates that policyholders must pay, there are different levels of risk which are reflected the different premium rates. This is actually how a long term care insurance company determines the premium rate that you will pay, in which I will further explain in a future article.  What underwriting procedures are employed? The first step of underwriting that all carriers use is the application form where the applicant lists his or her relevant personal health history and authorizes the insurance company to examine their medical records.

Often the carrier will schedule a phone health interview that lasts for about fifteen to twenty minutes. One of the main purposes of this telephone call is to assure the carrier that the applicant does not have any cognitive problems that would become evident in the way the phone conversation is conducted.  After this, the carrier will then request a copy of the medical records from the applicant’s primary care physician to verify that person;s overall health. If the applicant has been treated by a specialist for any serious illness in recent years, a copy of those medical records may be requested as well.  This is where the whole process can sometimes bog down for a few weeks if the doctor’s office does not process the record request quickly. However, once the carrier receives the medical records, a final underwriting decision usually follows very quickly.

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Becoming familiar with the foundational features and options of a good long-term care insurance (LTCI) policy requires taking the time to educate yourself before making your final decision. This will indeed help in ensuring that you get the policy that will best fit your particular needs. The very next step would be to find the right insurance provider that will be right for you. Since there are a number of LTCI carriers to choose from, here are a few suggestions for  selecting a company that offers a quality product and is worthy of your trust in the many years ahead.

Among the companies that offer LTCI, there are a few that have an outstanding reputation. By that, I mean these companies have distinguished themselves over a long period of time as financially solid, rate-stable carriers with an excellent customer service record. The only problem is that we see so many stories in the media these days of other LTCI companies whose record in these areas is being seriously challenged. It’s been reported that some have appeared to excessively deny claims in order to make a profit. Others have had to request hefty premium increases due to a much higher number of claims than they had projected. While some of these stories may hold some facts,  what we don’t hear is the good stuff: LTCI companies that really adhere to their claims of the  customer being #1.

The June 18, 2007 issue of Newsweek magazine recommended the following four companies as being major carriers that can be worthy of your consideration: Genworth, John Hancock,  MetLife, and Allianz Life. Of course, that does not mean that there aren’t other fine companies represented in the LTCI  field, but the four carriers identified by Newsweek are among the oldest and financially strongest in the industry. They also have extremely favorable records of customer satisfaction.

Genworth, John Hancock, MetLife and Allianz Life are all fine choices if you are in excellent health. However,  if you have health issues that are not serious enough to render you uninsurable, but will most likely disqualify you for ” preferred ” rates, then the company you have selected can have a significant impact on your premium. The reason for this is that each company has its own underwriting procedures that it uses for rating policyholders. These procedures can be different from one company to the next. For instance, one company will not issue a ” preferred ” rating  to anyone who uses even a single blood pressure medication, while others will allow the use of up to four of these  medications and still award the highest rate classification for long term care

If you have more serious health conditions, the difference in the way individual carriers treat those issues can even be more serious. In other words, some health conditions that one carrier may decide to accept may be cause for rejection  by another provider. This is where the help of a knowledgeable, experienced agent who can choose  from several top companies in the LTCI field, can be a real asset in finding the company that is not only  trustworthy and reliable, but also best fits your particular needs and home health care history.

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Long term care insurance is a very good financial protection option for anyone who has enough assets to protect and can comfortably afford the premiums. It can help ensure that all of the time and effort you have spent on acquiring a sufficient retirement income is not lost due to the rising costs of long-term care. There are so many specific advantages for couples purchasing long-term care insurance. Take a look at this: most often, the healthier spouse acts as the primary caregiver.

Without long-term care insurance, the healthy spouse often takes on the bulk of caregiving duties, just to try avoiding the expensive costs associated with either in home care or institutional care. Eventually, this can leave the caregiver almost as ill as his or her spouse. Long-term care insurance helps provide the necessary funds so that the healthy spouse can make sure that quality care is provided for the ill spouse while not further endangering his or her own health.

Will We Save Money? Couples can even save money on the purchase of long-term care insurance, as all major carriers will discount the cost of a policy by thirty to forty percent when both spouses are on the same policy. This can result in significant cost savings for married couples. The great news is that even those who may not be married but have lived with someone else with whom they are in a committed relationship for more than a year may also receive the same discount for long-term care insurance.

What Should We Do If One of Us is Declined? If one spouse is approved for a policy but the other has significant health issues that preclude him or her from qualifying for long-term care insurance, this does not mean that the couple should decline coverage for the healthy spouse. Long-term care insurance is still a major advantage for this couple because no one knows which spouse will need long-term care first. If there is a major reversal of health for the previously healthy spouse, the one who has health issues originally would be in an even more disadvantaged position as a caregiver.

The fact is, long-term care insurance would provide the funds needed for great quality care without damaging the health of the other spouse who was declined for the long-term care insurance policy. It is no longer reasonable to forego health insurance for one spouse simply because the other cannot qualify for a major medical plan. The same is true for  continuous care insurance. It may be disappointing that both cannot be covered, but the financial risks for each of them are still prevalent and should not be ignored.

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Everyone knows thay paying for insurance premiums is one thing we don’t like doing and long term care insurance is no exception. We pay these premiums because the alternative leaves our retirement income and investment assets exposed to high risk if long-term care becomes necessary and we have to pay for the care ourselves. It is no secret that the cost of health care facilities care can quickly drain your retirement funds and force a retiree into financial ruin. By purchasing long-term care insurance, a policyholder is accepting a small loss each year in the form of premiums paid. This relatively small loss helps ensure that he or she will not be wiped out financially by unmanageable long-term care costs in the future.

3 Choices for Premium Payment Periods

For those not familiar with long-term care insurance often wonder how long the premiums will need to be paid. The answer is that there are three choices for the premium payment period usually offered by insurance carriers. The most favorite choice by far is a ” lifetime ” payment period which requires the payment of premiums until death or until the policy is activated. Some object to paying these premiums for such a long period of time. In response to that objection, I usually ask prospective clients to consider other forms of insurance that they currently have right now. For instance, would they expect to only pay premiums for health or major medical insurance for a short time, or do they plan on paying those premiums for life? Would’t they expect to pay auto insurance premiums for as long as they drive? Isn’t it reasonable to pay homeowners insurance premiums for as long as they own a home? As long as the financial risk is present, the payment for the insurance premiums will always be there. Since the risk of needing long-term care is present for as long as we live, long term care insurance premiums can be expected for the remainder of our life.

Shorter Premium Payment Periods Equal Higher Premiums

The second and third ideas of payment of long term care premiums gives the policyholder to condense all of those expected premium payments into a shorter time period. For those under fifty-five years of age, a ” pay to age sixty-five ” option may make sense. For others a ” ten-year pay ” option can also be a good choice. Because the expected premium payments over a lifetime are simply put together into a shorter timeframe, the cost of these premiums is much higher. So therefore, these choices usually make sense for policyholders who can take advantage of tax deductions that help them reduce the overall cost of their long-term care insurance.

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Life has a lot of beautiful and wonderful times.We go through the joy of youth.We go through the joys of being an adult.And when you do find a quality senior home health service, you can still have senior years to enjoy.

A senior home care Escondido company is an option other than a nursing home.It is a choice a bunch of seniors are going with.

It has a lot of the things that a nursing home does not.It affords you the luxury of a familiar environment.  Still gives you a sense of independance.More importantly, you will still be able to experience the love and joy of your family and friends.

Well picking a good home care provider is not as easy as it sounds. Obviously something as big as this decision will take some careful thought. After all, if you do pick home care, you will be placing a lot of trust in their huge responsibility you give them.

So how will you be able to find that good senior home health care company?  Well follow these tips I have gained from running my own Home Health Care Services Oceanside company. 

First you want to make sure they have qualified and quality caregivers.Depending on what type of service you will need will dictate what the qualifications of the caregiver will have.For example you may be in need of the services of a certified nursing assistant.Or you may just be in need of finding a good certified home health caregiver.Whatever the case could be
you can make sure the company you choose has qualified caregivers.

Second you want quality.  What do I mean by that.  Well you want to make sure they do a thorough background check on your caregivers.  After all this person will be with you or your loved ones daily.They are going to be in charge of all the important tasks.You want to be confident that the person looking after you is a quality person.

What we do as a senior home health care La Mesa company is make sure we do thorough background checks.  We make all applicants go through a criminal check.  We also check if they have a good DMV history.Also more importantly we perform drug tests.Then we look through their past employment history.

If you do these couple of steps you are going to find a good senior home care company you can trust.

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There are so many suggestions and opinions about long term care insurance which is actually based on anecdotal evidence. Every once in a year, the American Association for Long-Term Care Insurance publishes a LTCI Sourcebook that cuts through the fog of opinion by helping to establish the facts.  The 2009 version of this publication just became available and here are some of the new results of the data gathered from a large sampling of the leading continuous care insurers about those who have an individual long-term care insurance policy:

Number of policyholders and amount paid in claims: 8.25 million Americans currently have long-term care insurance and last year 8.5 billion dollars were paid in claims to 180,000 policyholders.

Age of claimants: Of the new claims opened during 2008, 61% of claimants were age eighty or older, 30% were between seventy and seventy-nine and only 9% were under the age of seventy.

Sales by issue age: It was found that 24% of long-term care insurance buyers were between the age of forty-five and fifty-four. 53% were between fifty-five and sixty-four. 15% were between the age of sixty-five and seventy-four.

Sales by daily benefit amount: Only 6% bought policies with a daily benefit between $50 and $99, while 31.5% were between $100 and $149, 35% were between $150 and $199, and 27% bought more than $200.

Sales by elimination period: The number one favorite elimination period selected was ninety days, with almost 83% of buyers choosing it.

Sales by benefit period: Benefit period selected by long-term care insurance consumers were as follows: 2 years, 7%; 3 years, 30%; 4 years, 15%; 5 years, 24%; 6–10 years, 11%; and Lifetime/Unlimited, 13%.

Sales by benefit increase mode: 40% chose 5% compound interest, 16% chose simple interest, 13% chose a Future Purchase Option, 7% chose CPI (consumer price index), 14% chose none, and 10% chose other forms of inflation protection benefits.

Care settings paid for: 42% of long term care insurance claims paid were to policyholders receiving home care, 30.5% to those in a nursing home, and 27.5% to those who are staying in an assisted living facility.

There were many other interesting facts revealed by this gathering of important data that I will try to include in future articles. The information presented here should be helpful to anyone who is seriously considering the purchase of long-term care insurance.

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The New York Times have just published an article entitled, ” Caring for the Caregivers ” and while I read the piece, I merely shook my head a few times thinking about the implications in the article and what I know from my perspective in the eldercare industry. One of the first things I learned in this business is that when it is acceptable people would want to age in place, meaning live in their homes with whatever help, be it homecare and/or technology, they will need for as long as they can. America’s aging population is increasing and there is also an ongoing shortage of homecare aides to help this burgeoning group do what they want, which is to stay comfortably in their own homes.

However, as the article points out:

” According to the Labor Department, personal and home care aides are expected to be the second fastest-growing occupation in the United States from 2006–2016, increasing by 51 percent, slightly behind the expected growth in systems and data communications analysts. “

So who exaclty are these people who come into the homes to take care for your parents? The NY Times article points it out succinctly, ” most home care aides are women, low income and minority, and many of them are immigrants. ” And although ,some states have taken steps to provide them with basic labor protections, most of these women work for agencies that under the existing federal laws are allowed to mark them as companions, leaving them with no rights to overtime and minimum wages. This is not to say all agencies take advantage of this fact, there are lots of agencies that have realized the efficiency of low-staff turnover and treat their workers accordingly. This sector of healthcare is growing rapidly and yet many of its workers are not protected. And they should be, because they are the backbone of the aging in place movement; the ones supporting and tending to the needs of our elders in their homes.  So what’s being done about this issue?

Right now the Service Employees International Union are now working to unionize homecare workers in every state. Washington and Montana have unionized homecare workers, while here in California, in-fighting is still ongoing between unions. Many have voiced the opinion that new legislation has to be passed by the Labor Department to offer greater federal protection for homecare workers. I believe this is the best way to keep these workers safe. (Yep, that’s a nudge, President Obama, but I do realize you are very busy these days.) In the end, it all circles back to quality of care. Happy, well-paid, well-trained workers who work for agencies with low turnover are, and will always be, the ones delivering the highest quality of long term care to our mothers, fathers and possible even us one day.

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A vital ingredient in any successful long-term care insurance plan is to have a cheap policy without having to give up on good coverage. If you have recieved quotes from several highly rated insurers and yet find that the premiums are still too much to bear, there is no need to panic and assume that long term care insurance costs too much. You may be able to adjust the benefit amounts of the original quotes to bring the premiums more in line with your expectations, thus ensuring an affordable policy.

Know the Costs of Long-term Care Where You Live

One way to lower premium costs is to make sure you know what the actual costs of care are in your area. There are many statistics used when discussing long-term care costs and often these are based on national averages. The actual cost of home care, nursing homes and assisted living facilities in your particular area may be much lower. You can find out about local long-term care costs by either downloading the latest Genworth Cost of Care Guide or by calling a few local home care agencies and long-term care facilities to ask for comparison rates.

Adjust Your Benefit Period

Another different method to lower long-term care insurance premiums is to use a shorter benefit period. Many consumers feel that unlimited benefits are necessary for good coverage. A recent study published by the American Association for Long-Term Care Insurance in their 2009 Sourcebook revealed that only eight percent of those who buy a three-year benefit period exhaust the policy and still need care. Only a little over one percent of those with a five-year benefit period will see their claims closed due to policy exhaustion. This means that lowering the benefit period can be a practical way to lower insurance costs without giving up vital coverage.

Reexamine the Elimination Period

One way to bring down long-term care insurance premiums is to increase the elimination period (the number of days after your care begins that precedes the insurance company’s first payment of claims).

Take note that almost 90% of individual continuous care insurance policies uses a period of elimination between ninety and one hundred days according to the same 2009 Sourcebook referenced above. If you have initial quotes used a thirty-day or sixty-day elimination period, you may have the ability to significantly lower the premiums by choosing a ninety-day elimination period instead. There are other ways that an experienced long-term care specialist can help make this kind of insurance which is affordable for you. If you ask for suggestions on bringing down your premiums, the specialist will be happy to work with you to craft a long-term care insurance policy that is effective and affordable.

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Private insurance companies sell LTCI policies to offset the costs of long term care. LTCI is just like all insurance policies that requires premiums to help recipients avoid paying large amounts of money in the event of an illness or an accident. Premiums are based on the individual’s age by the time of the purchase and are always locked in for the life of the insurance policy. LTCI covers the following, {depending on the policy you choose: and is dependent on the policy that you choose:}

1.Care in a skilled nursing facility

2.Care in an assisted living facility

3.Home health care

4.Adult day health care

When buying a LTCI policy, it allows the policyholder to select from many options, such as the amount of the daily benefit, the number of years that the policy will pay benefits, and, after the applicant qualifies for a policy, the number of months or days before the policy will begin paying benefits.

It’s very important to evaluate policies carefully to see which of them offers the benefits you require with a premium that will fit your budget. Policies differ in their contract conditions, deductibles, benefits and deductibles. It is also important to consider the rising cost of health care. Be sure the LTCI policy provides inflation protection for benefits to increase as health care costs continue to rise. Policies are generally labeled according to the place in which benefits are paid.

Take note that homecare only policies pay for care at home and in an adult day care or adult day health care facilities. Just make sure that the policy includes both types of day care. Facility-only policies pay for care in a skilled nursing facility and in an assisted living facility. These comprehensive policies pay for care in a skilled nursing facility, assisted living facility, adult day care or adult day health care facility, and at home.

Since LTCI claims are always paid many years after the purchase of the policy, it is imperative to check the following:  The financial strength of the company. Some of the industry’s major rating services are A.M. Best , Duff and Phelps, Moody’s, Standard and Poor’s and Weiss Ratings . Reputation and claims-paying history of the company. Contact your State Insurance Department for more information on specific private insurance companies.

The applicant must be healthy at the time of the application. Each insurance company has individual requirements and/or limitations. Not sure when is the right time to buy an LTCI policy? Or how to assess what you will need from a policy? Visit our Expert Column on Financing Long Term Care to find out more.

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Planning for long term care is complicated. Each person’s needs are unique, therefore, the cost of long-term care varies greatly. Some social and physical assistance is available for free or at a low cost, while very expensive nursing home or home health facilities can have an expense of $200 per day or maybe even more. There are many different ways to finance long-term care. You may need to use a combination of payment sources, which may include long-term insurance, Medicare, Medicaid or other programs, in addition to your own resources.

It is essential to consult a professional such as an elder law attorney, financial planner or an accountant when planning for long-term care, this person should be well versed in estate planning, public programs like Medicaid, and issues and the needs of senior citizens. These long term care professionals often work as a team. Gilbert Guide recommends getting a second opinion before making any final decision especially on financial matters. Check out our Learning Centers and Expert Columns where our long-term care experts point you in the right direction, raising awareness of the issues you need to know about when planning for your future.

Here are many of the options available to reimburse for senior care: (Click on the links below to see what else is covered outside of long-term care.)  Medicare, which for long-term care, covers some skilled nursing care either in a nursing home or in the home along with hospice care.  Medicaid, which is the partially federally funded yet state-operated program provides medical care for certain low-income individuals and families who have limited resources. Medicaid usually covers nursing home care, however for some certain states, funding is available for assisted living, homecare or home health care.

Medigap, which are policies available to Medicare, A & B enrollees who are not Medicaid recipients have the option to sign up for and covers some nursing home care.  Managed Care (HMO) provide expert services for nursing home care which is above Medicare’s basic offering along with additional medical assistance outside of long-term care. Long-term Care Insurance (LTCI) can cover anything from non-medical homecare to nursing care; however, it depends on the type of policy you purchased. Veterans Benefits will cover adult day health care, home health care, respite care and hospice care.

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