Tag Archives: Insurance Industry

Home Health Care – Another Option for Your Long-Term Care Needs

Home Health Care – Another Option for Your Long-Term Care Needs

You’ve decided that the purchase of a long-term care policy for yourself and your spouse would be advisable.   The figures, however, are daunting and the premiums exceed your budget.  If you are considering the idea of long-term care insurance, the option to receive necessary assistance in your own home may be more preferable to living in a nursing home.  Because the vast majority of the middle aged and senior population are in favor of this option, the insurance industry has responded.

The assisted living and home health care industry is growing along with the desire to receive care in your own home.  Most long-term care insurance providers are now offering the consumer the opportunity to purchase insurance that provides coverage for community health services and home health care at much lower rates than a full blown long-term care policy.

For example, using the guidelines of one “A” rated provider, full coverage for a 55-year old married couple, both in good health, with a $150.00 per day policy featuring inflation protection and a 30-day waiting period, would require an annual premium of about $2600.00.

The same provider also offers a policy covering home health care and community care coverage for an annual premium of just under $1,000.00, a considerable savings over the full coverage policy, while still offering protection for the most commonly required assistance.

While some policies will restrict the care to be offered by licensed providers, there are policies now available which also offer coverage for services performed by non-licensed personnel, allowing the opportunity for care to be provided by people known to the policyholder, such as a family friend or a neighbor.  This raises the comfort level of the care provided, since allowing strangers into their home is something of which most seniors are wary.

In order to prevent fraud or abuse of the coverage, family is excluded from providing services in most cases, unless the family member happens to be a licensed provider.

As the baby boomer population ages, and home health services are seeing increased effectiveness and popularity, the purchase of this type of coverage can be an affordable, attractive alternative to the more traditional long-term care insurance.

How to Choose the Best Health Insurance

How to Choose the Best Health Insurance

It is very difficult to evaluate what health insurance plan is the best fit for you if you don’t have a basic knowledge of insurance industry lingo and terminology. An insurance provider can describe the various insurance plans ad nauseam, but unless you understand the technical terms, you are not likely to be any wiser by the end. The following are some of the most commonly used and important health insurance terms:

Exclusions: the services that will not be covered under a health insurance policy. Exclusions vary per provider, but cosmetic surgery, experimental treatments, or home care would be examples of common exclusions.

Co-payment: the fixed out-of-pocket amount that you will pay for each medical service or prescription before the health insurance provider begins to pay for the service or prescription. This amount will also vary per policy, but usually range from $10.00 to $50.00.

Co-insurance: the percentage of the total cost that you will pay for a medical expense. Co-insurance may be in lieu of a co-payment or in addition to it. It also varies per policy, but a common arrangement is 20% patient payment and 80% insurance provider payment.

Deductible: the amount of out-of-pocket money you will pay before any health care expense is paid by the health insurance provider. The annual deductible can be anywhere from $500 dollars to thousands, depending on what type of insurance plan you choose.

Coverage Limits: the pre-set monetary amount that a health insurance plan will cover. Once you incur medical expenses past the limit, you will be responsible to pay the entire amount out-of-pocket. (Note: the Obama health care reform includes phasing out annual coverage limits by setting annual limits no lower than $750,000 this year, $2 million in 2012, and completely prohibiting them in 2014.)

Premium: the monthly payment amount that you pay to your health insurance provider to continue coverage.

Out-of-Pocket Maximums: the point where your payment obligation ends and the health insurance company pays all future covered medical costs. These maximum out-of-pocket expenses can be applied to a particular benefit section or the all the policy benefits.

How to Determine What Health Insurance Plan Is the Right One

Health insurance coverage should be based on individual need and monetary resources.

Cost is obviously a huge consideration, but luckily consumers have a lot of health care plan options. The cost of a health care plan will vary based on the benefits it provides and what insurance company is providing it. Exclusions, coverage limits, deductibles, etc.. will all impact the monthly premium amount.

At the same time, a policy is virtually worthless if it fails to cover your expected medical needs; for example, if you expect to become pregnant, but the coverage excludes maternity, it probably will not be a very beneficial plan for you. There may also be certain known medical needs, such as prescription medications, mental health needs, immunizations, home health, therapy, eyeglasses, or preventative care, that you would want to ensure are covered in whatever health insurance policy you choose. Always understand the benefit’s a plan offers before signing on the dotted line.

Lastly, you should make sure that the plan is offered by a reputable health insurance company. It is also beneficial if the company has a professional insurance agent available for you to meet with. The insurance agent can best apprise you of all of your health care coverage options, help you determine what plan best encompasses your financial and medical need, and answer any policy-specific questions you might have.

New Insurance Policies Blend Long-Term Care and Life Insurance Coverage

New Insurance Policies Blend Long-Term Care and Life Insurance Coverage

Many people take a gamble when it comes to planning for their long-term care needs: They assume they will probably never need long-term care services, or that if they do need these services, they will rely on their savings to cover the cost. Consequently, their “planning” consists of doing nothing. This clearly isn’t a practical solution, because an extended period of long-term care could cause a person financial ruin.

The insurance industry has developed a new kind of coverage for people who hesitate to buy a long-term care insurance policy. This new type of coverage blends the benefits of life insurance with the protection of long-term care. Here’s how it works:

You pay a lump-sum premium for a universal life insurance policy, which builds up a tax-deferred cash value, in addition to providing life insurance that will pay a death benefit to your beneficiaries. If you need long-term care services, you can use this death benefit to help pay for the cost. Depending on the terms of the coverage, a $500,000 life insurance policy might pay from $200,000 to $500,000 toward the cost of nursing home care, in-home care and/or assisted living expenses. The amount used to pay for long-term care expenses is deducted from the death benefit, and any part of the death benefit that is not used to pay for long-term care expenses is paid to your beneficiaries as life insurance proceeds. These proceeds are generally free from federal income tax.

A blended life insurance/long-term care policy costs more, but there are potential advantages that may make this additional cost worth it for your situation. You have some earmarked, guaranteed funds to help pay for any needed long-term care services. If you don’t need long-term care services, your beneficiaries receive the unreduced death benefit. In addition, universal policies typically charge a premium that is guaranteed to at least maintain the basic benefit, although it may not be enough to build cash value. That eliminates the problem of rising rates on long-term care insurance that prompt many people to shy away from buying this type of coverage.

If you decide to buy a blended life insurance/long-term care insurance policy, be sure you understand the long-term care benefits it would provide. Exactly what type of long-term care services would the policy pay for-In-home care? Assisted living? Adult day care? Nursing home care? How does the policy determine the amount of long-term care benefits it would pay? For example, does the policy pay a percentage of the total death benefit, or does it pay a percentage of the death benefit monthly?

Check if you can add inflation protection coverage. Find out if there are any conditions under which premiums could increase. Also, make sure that the policy is “tax-qualified,” so that long-term care benefits won’t be taxed as income.

Every person’s needs vary, but if this type of dual long-term care and life insurance coverage suits your needs, you’re able to buy two types of insurance protection in a single policy, and with a single premium.