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Oct 02

Why Would Anyone Buy a Long-Term Care Insurance Policy Without Home Care Benefits?

First, let’s define what a Facilities-Only policy is.  It’s a long-term care insurance policy that pays for assisted living facilities and nursing homes but does not pay for home care or adult day care. Why in the world would anyone want that, you say?

1) Single people – think about what it takes to get a long-term care insurance claim paid.  You have to be expected to need help with at least 2 activities of daily living (e.g. bathing, dressing, transferring, etc.) at least 90 days or have a severe cognitive impairment that means you can’t be left alone.  Home care benefits can be great if there is a primary caregiver, but someone who lives alone may not be able to benefit from a few hours a day of home care.  Even with 10-12 hours a day of home care, what will the person do the rest of the time? Also, living alone when one is impaired can lead to depression and isolation…not all that safe.

On the other hand, a “country club” assisted living facility doesn’t look anything like a nursing home. The impaired person can be alone in his or her unit or mingle with others.  There’s no housecleaning, cooking, laundry or yardwork to deal with. Yet someone is nearby to provide help 24/7 if the resident falls or has any other problem. What’s not to love about this situation??

front-entry-opt ALF palm trees

2) Couples – believe it or not, I have had couples who do not want to stay home. If one becomes impaired, they want to go to the country club assisted living facility, and these places don’t charge double for two people. Contrary to popular belief, long-term care insurance does pay for the room and board for an assisted living facility.

You’ve heard me say over and over that most people are never in a nursing home.  A big reason why nursing home occupancy has gone down is because many people who would be in a nursing home can now live safely in an assisted living facility. There are memory units that provide a safe environment for severely cognitively impaired.  They cost a little more,  but provide a much more pleasant environment than the typical nursing home and cost considerably less than a nursing home.

ALF living room ALF bedroom

So what am I getting at? There are still two LTC insurance policies left that allow you to choose a Facilities-Only plan at a substantial premium savings over a comprehensive plan that pays for home care. These plans will not be available much longer. In fact, one of them is only available for about 10 more days. Neither one of these plans are gender-rated so they aren’t charging women a lot more than men.

Rather than wasting valuable premium dollars on home care that you will never use, why not put your premium to better use by buying a higher daily or monthly benefit so you can truly afford the “country club” ALF that can cost $4,500-$6,000 a month today depending on where you live? In 30 years, I think we are looking at $18,000-$24,000 a month, which is why inflation coverage is so important!

Bottom line – if this idea interests you, please go to https://www.gotltci.com/contact-us/ and complete the short questionnaire so I can help you while these plans are available.  Then your children can visit you in a beautiful, comfortable place and care ABOUT you, not FOR you.  Big difference. mother and daughter

4 comments

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  1. Linda

    Fast question. Unum is raising my rate 90.6% over the next 3 years.
    Do I decrease my future inflation rate from 5%to 3% to avoid this increase.
    I pay 95.80 monthly. for a lifetime TLC w/ 100% home care? I am 68 and had this policy since I was 49. I know increases are evident but this a lot. I began with a rate of 58.50 monthly. It will pay 4584.00 mo. now. This is sad to have it go up this much.

    1. Phyllis Shelton

      I have the same policy Linda and I’ll be accepting the rate increase without thinking about it. This means your monthly premium will be about $200 a month at the end of the 3 year period. Your monthly benefit is about what a nice assisted living facility costs in most parts of the country, and you need to keep the 5% compound inflation to stay current. If you need nursing home care as a last resort, that’s when you can use your own money, but let the insurance pay for the “country club” assisted living facility. Your unlimited benefit period for that price is completely irreplaceable. Most carriers don’t even offer unlimited anymore. Did you know you can save by paying annually, not monthly? Ask UNUM to tell you how much but it’s usually almost a month’s premium. The big thing though is that most carriers today are gender rated which means women pay a lot more. The only one that isn’t yet is Mass Mutual. A single 68 year old for a monthly benefit of $4500 and a six year benefit period is $7500 a year ($655 a month). That’s with the preferred health discount. The best married rate is $5200 a year ($458 a month). Now I’ll really make you feel better. A 49 year old applying today for that plan is $425 a month for a single person and the best married rate is $297 a month. So you have an incredible deal Linda. If you do need to decrease it in the future, you could drop it to 3% when you are much older – maybe 80. You can also ask UNUM what it would be to reduce the benefit period to six years, but don’t do that if you have Alzheimer’s in your family history. Remember, the premium stops when you have a claim. I don’t know if you have the Total Home Care which means you can pay anyone you like, but if you do, you have the Cadillac of all policies so I encourage you to hang onto it like it is GOLD, which it is. In 15 years, your monthly benefit will double to $9168 a month. If you don’t have a claim, you will pay $36,000 in premium over the next 15 years and if you have a claim that year, the policy can pay $110,016 [$9168 x 12] and it will keep growing the rest of your life! Even if your premium doubled it would be a phenomenal deal. Hang onto it.

  2. Cheryl

    I have LTC. Started $2495. 2 yes ago doubled. I’ M going on 75, live alone.

    1. Phyllis Shelton

      Hello Cheryl – thanks for your comment. Congratulations on securing LTC coverage for yourself. would you like me to review your policy for you? I’m happy to do that and make sure you have what you need for that price. If you would like that, please go to https://www.gotltci.com/contact-us/ and complete the short questionnaire so we can get back with you and set up a convenient time for us to talk.

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