The New Generation of Long-Term Care Insurance

The New Generation of Long-Term Care Insurance
Protecting Retirees Against Financial Disaster

By Roch Rodrigue, Todd Benefits Group

It happens all too often. After saving and planning all their lives, a couple settles down to enjoy their hard-earned retirement. Then, one spouse is injured or falls seriously ill, and needs long-term care. Their health insurance won’t cover the cost of the nursing home, and because they’ve saved up that nest egg, they don’t qualify for Medicaid. It’s only a matter of time before the cost of the nursing home—over $5,000 a month—obliterates their life savings.

This is the kind of scenario older Americans fear most: the risk of losing home and independence, being forced to depend on their children or the government for help. Research shows that 43 percent of Americans who reach the age of 65 will require long-term care during their lifetimes. One in 10 will spend five or more years in a nursing home. Healthcare plans and Medicare combined pay only about 3 percent of the costs of long-term care, and Medicaid rescues only those families who descend to the poverty level. The lion’s share of long-term care funding comes from savings and, increasingly, from private long-term care insurance.

What Long-Term Care Insurance Covers

Long-term care, or the daily services required by individuals unable to care for themselves because of prolonged illness or disability, can range from help at home to assisted living facilities to skilled nursing-home care. Likewise, insurance policies for long-term care vary in the scope and features available.

Long-term care insurance typically reimburses the owners based on actual costs paid to certified providers, and can cover nursing-home care, in-home care or both. Most policies offer some degree of flexibility in the terms of coverage; for example, the dollar amount of the daily benefit, the length of time the benefits will continue, and options to protect against inflation.

Look at the Company Behind the Insurance

Long-term care insurance claims must often be paid 10 or 20 years after the policy is written, so it’s always wise to check the financial strength of the underwriter. The best way to gauge financial strength is to be sure the insurance carrier has received excellent ratings from the industry’s major rating services: A.M. Best, Standard & Poor’s, Moody’s and Duff & Phelps. Information on ratings is available from the state insurance department.

As the population ages, the prospect of long-term care poses a growing threat to the financial security many couples have worked all their lives to attain. The new generation of long-term care insurance plans available today offer a practical and affordable way to protect older Americans’ assets and their independence.

The NYSSCPA has chosen MetLife as the long-term care carrier for its membership. NYSSCPA members may apply with special discounted premiums. But more important than the discounts are the options that MetLife offers. Members can obtain policies with reimbursement, indemnity or cash benefits.

For more information about a policy and the discounts available, contact a benefit specialist with MetLife’s plan administrator, the Todd Benefits Group, at 888-310-8633, or log onto the website at www.toddltc.com/nysscpa.