Considering Long-Term Care Insurance

Q: What is long-term care (LTC) insurance?

Generally speaking, LTC insurance is designed to help you pay for the day-to-day help you may require if, because of an injury, chronic illness, or old age, you need assistance with basic activities such as dressing, bathing, or eating. You're covered whether you need services at home, in your community, or in a nursing facility.

Q: Why should I consider LTC insurance?

After age 65, Americans have more than a 70 percent chance of needing some form of long-term care, according to a Roper study released by the American Society on Aging.

Q: How expensive is nursing home care?

A study this year by GE Financial's Long Term Care insurance division found that the average cost of a year in a nursing home is $57,700--a seven percent increase from the previous year's study. Nursing home care is most expensive in Alaska ($166,700 per year) and least expensive in Louisiana ($35,900).

Q: Doesn't Medicare (or Medicaid) pay for nursing home care?

Medicare provides limited coverage for skilled nursing care, for no more than 100 days in each benefit period, and only following a hospital stay.

Q: Where can I find out more about long-term care insurance?

The National Association of Insurance Commissioners publishes an excellent booklet, A Shopper's Guide to Long-Term Care Insurance. A copy of the guide must be presented by a long-term care insurance representative at any meetings with potential clients.

--Doug Terwilliger
NEA Member Benefits

Comparing Policies

Here's what to ask insurance representatives when comparing long-term care insurance products.

• What is the underwriting company's financial health? Ask for the ratings from A.M. Best and Standard & Poor's.

• Does the policy provide benefits for all levels of nursing home care as well as community and home health care, including respite care?

• What options does the policy provide?

• What is the total dollar value of your policy?

• What elimination or waiting period options are available?

• Must elimination or waiting periods be satisfied more than once per lifetime?

• What provisions for inflation are offered?

• Does the policy provide benefits for care coordination or case management of treatment?

• How long before pre-existing conditions are covered?

• Does the policy require the insured to be unable to perform two out of six activities of daily living (ADLs) before benefits are paid?

• Does the policy include a waiver of premium clause? If so, how many days does the policy specify?

For more information on long-term care, visit www.neamb.com.

--D.T.

Quick Tips

Shop Around
A good general source of information on LTC insurance is A Shopper's Guide to Long-Term Care Insurance, from the National Association of Insurance Commissioners (816-842-3600; www.naic.org).

Compare Policies
Be sure to compare policies based on common features. Don't forget: NEA Member Benefits has designed a program, the NEA MemberCare? Long-Term Care Program, based on your needs. For more information, contact NEA Member Benefits at 800-637-4636 or go to www.neamb.com.