Long Term Care Insurance Questions
As a Mom, I worry about my kids all the time. As Ive grown older I have started worrying about my own mother as she ages. I have such a great relationship with her and want what’s best for her. I’ve noticed in the past few years that her health has slipped a bit. She now takes several medications like blood pressure and arthritis meds and it just got me to thinking that she one day might not be able to care for herself and need help. I’m a mother of three and would not have time to take care of her as well so I researched Long Term Care Insurance. I found a site where you can compare companies and they mailed me the Long Term Care Insurance information. Here are a few questions I had with the agent:
1. Can Long Term Care Insurance be used for in home care with my children as caretakers?
2. Is the initial pool of money the amount that is reserved before Medicaid kicks in?
3. Does the Long Term Care Insurance benefit amount compound along with the amount of the total pool that can be use?
4. Does Medicare pay the first 90/100 days?
5. Can I have three beneficiaries and can it be set up to go directly to them and not go through probate?
6. Is there an extra charge for designating someone to be notified in the event of a lapse?
7. Is there an extra charge for a Long Term Care Insurance nonforfeiture benefit?
8. How did you derive the figure of 2 months prepaid? Do I get all of the Long Term Care Insurance premiums returned if I am denied coverage?
9. How much of a percent do you personally and does the company get annually from my payments?
10. Can I get Plan A for 3 years? Can I up the pool of money on Plan B? Or up the $150.00/day on Plan C and have coverage for 3 or 4 years? Ideally, I would like a starting pool of around $270,000.00, 3% compound increases, 90 day waiting period, for 3 or 4 years of coverage.
11. If it turns out that I die before needing care i.e. fatal heart attack, do my beneficiaries get anything back out of the money that I have paid in?
12. Would you purchase this Long Term Care Insurance for yourself or your parents?
Answers to the Long Term Care Insurance questions:
1. Benefits can be used at home but they don’t allow kids to be paid unless they work at a home health care agency and the agency pays them. This is industry standard because of the high cases of fraud that occurs so almost no one allows it. A company called ABC-Low-end insurance company does but they are expensive and have a 54% financial rating score vs. Mass Mutual’ s 98%. I’ve sold LTC since 1998 and years ago they allowed family members to be paid on some policies. To date, I have never had a client use that benefit and get their kids to take care of them because they all have ended up wanting the kids to manage the care not provide it.
2. Yes, you can use your entire pool of money and that is used before Medicaid. This is a OH Partnership plan too so may offer assets protection equal to benefits paid if you happen to use up all the benefits.
4. Medicare and Supplement may pay the first 100 days of nursing home or re-had care provided you meet their criteria such as having a three day prior hospital stay, entering the facility within 30 days etc.
5. They use to have a return of premium rider that could be added but no longer offer that option. You can leave the beneficiary blank.
6. No, they actually encourage to add a person.
7. Yes, it adds about 10% to the cost. However, we don’t advise paying the extra premium because the stats say that 99% of people keep their LTC policy. You’d probably pay an extra premium and never use that benefit.
8. It’s their monthly rate times two. All deposit premium will be credited to your account once approved and they will send you a bill less the entire deposit. Yes, if declined or you simply change your mind, you’ll get all the deposit premium back.
9. We make it a practice to not get into commission numbers.
10. See attachment for Mass Mutual vs John Hancock. On the four year plan I bumped up the daily benefit to 180/day to try and get your pool as close to your goal of $270,000 as possible but that of course ups the cost. If you go with the three year plan and wanted a 270k pool you’d have to start off at 240/day which would be really expensive.
11. The estate would get any unearned premiums as in say the annual premium was paid and the person died three months later, Mass Mutual would then refund the other nine months’ worth that were not used.
12. Yes, Mass Mutual is the clear play, especially for females, because all other companies like Hancock penalize you for your gender and charge you more. Male rates might be a bit lower with Transamerica so I’d look at that one but unless there was a significant price savings with Trans, I’d absolutely go with Mass Mutual because they are the only company that has not jacked up rates on old customers and have the highest financial strength ratings.