Our promise to our Employer Group Long Term Care Insurance clients is to give them unparalleled service coupled with a technology-forward support website that offers a 100% paperless experience for employees and plan participants, and comprehensive premium increase support for their employee. Our client and their employee deserve this promise and our 30-years of long term care insurance claims experience. Your employees have invested in their future and we are their to make sure they receive the uninterrupted benefits they deserve.
Group Long Term Care insurance plans are designed for the workplace and enable employees to purchase guaranteed issue coverage. Group policies guarantee a certain amount of coverage to all employees regardless of age. This is different than the individual market where you have to answer medical questions and can be turned down for coverage. This is a very valuable feature because decline rates for coverage in the non-group Long-Term Care insurance market are high.
Benefits of a Group Plan
Premiums for group plans can be lower than premiums for comparable policies purchased outside the group market. This is especially true for females because premiums for coverage purchased through a group are gender neutral. Premiums for policies purchased outside a group are higher for females than for males.
Group plans often include features that are optional riders with individual policies. As an example, unlimited duration coverage is only available in the group market. It is difficult to find and qualify for more than a five-year benefit in the individual market.
Policies can be continued when employment ends for any reason. The coverage remains the same, but the employee pays the premiums directly to the insurance company, rather than having the premiums come out of their paycheck.
Group plans offer a few basic plan designs with limited options to ensure a smooth enrollment and minimize employee confusion. The plans can be totally voluntary (employee paid) or be partially or fully employer funded.
Premiums for LTC insurance are “issue age,” which means that your premiums will always be based on your age when you purchased the coverage. This is an important reason to continue your coverage from a group plan. If you leave the group and try to buy long-term care insurance in the individual market, your premiums will be based on your current age and you will have to be medically underwritten.
Long-Term Care insurance helps pay for care in your own home, in a nursing home, and in an assisted living facility. Your policy will pay you a certain amount per day or per month for a certain duration of time.
To qualify for benefits, you need to require standby assistance performing two of six activities of daily living as defined below. You can also qualify for benefits if you have a severe cognitive impairment and need standby supervision to protection yourself and others.
Activities of Daily Living:
Bathing – washing oneself by sponge bath; or in either a tub or shower, including the task of getting into or out of the tub or shower with or without equipment or adaptive devices.
Dressing – putting on and taking off all items of clothing and any necessary braces, fasteners, or artificial limbs
Toileting – getting to and from the toilet, getting on and off the toilet, and performing associated personal hygiene.
Transferring – moving into or out of a bed, chair, or wheelchair with or without equipment such as canes, quad canes, walkers, crutches or grab bars or other supportive devices including mechanical or motorized devices.
Continence – the ability to maintain control of bowel or bladder function; or, when unable to maintain control of bowel or bladder functions, the ability to perform associated personal hygiene (including caring for catheter or colostomy bag)
Eating – feeding oneself by getting food into the body from a receptacle (such as a plate, cup, or table) or by a feeding tube or intravenously.
There are two types of Benefit Payment Methods
Indemnity Policies: These are the most liberal policies. They will pay your entire monthly or daily benefit regardless of the expenses you incur during that day or month. Benefits are paid solely on the existence of a disability. However, you must incur some expense.
Reimbursement Policies: These are more restrictive policies. You must submit your expenses to the insurance company who will reimburse you for the expenses. If you only have $100 worth of expenses for the day and your daily benefit is $200 per day; you will only receive $100 for the day. However, your benefit will last longer; your benefit duration will be increased.
Professional Home care or Total Homecare:
Elimination Period: This is your deductible. It is the number of consecutive days or service days during which you must have qualified benefits and be under the regular care of a Physician before benefits are paid. Typical elimination periods are 30, 60, 90, or 180 days.
Shared Care: This is a joint policy where you can access your partner’s benefit and vice versa.
Survivorship: With this feature, if a husband or wife passes away, the surviving spouse’s premium can be waived permanently. Usually the policy must be in force for 10 years with no claims paid.
Cash Benefit: With this feature, once you qualify for benefits, you receive a portion of the full cash benefit of your monthly or daily benefit amount even if you incur no long-term care expenses. An example of this would be if you receive care from a family member or a friend.
Return of Premium: With this feature, all paid premiums (minus any benefits paid) are returned to the estate or beneficiary of your choice.
Waiver of Elimination Period for Homecare: With this feature, your elimination period is waived for home care. You receive benefits for home care as soon as you qualify for benefits.
Waiver of Premium: Premiums are waived once you qualify for benefits and your elimination period is satisfied.
Cash Benefit with no Elimination Period: If you have a Cash Benefit option, the Elimination Period could be waived.
Factors to Consider When Designing a Long-Term Care insurance policy:
- The cost of long-term care facilities and home care support in your area or the area where you intend to retire.
- Your family history (longevity, Alzheimer’s Disease, Parkinson’s Disease, Arthritis, etc.).
- The availability of family and friend support. Are you concerned about being a burden on your loved ones?
- How much of the long-term care risk do you want to insure?
Asset-Based Long Term Care insurance policies
Asset-Based Long-Term Care Insurance Policies have become a popular form of insuring long-term care expenses. One reason is that Asset-Based Long-Term Care insurance policies, are not “use it or lose it;” there will always be a Death Benefit unless long-term care benefits equal to the Death Benefit have been paid out. Another attractive feature of asset-based policies is that premiums are often guaranteed to never increase, though the Death Benefit may be reduced after a certain age.
There is a life insurance policy behind the Long-Term Care insurance. Asset-based long term care insurance policies are linked benefit insurance policies. The way this works is that you have a life insurance benefit for when you pass away, but if you have long-term care expenses, you can accelerate your life insurance benefit to pay for long-term care needs.
Two Types of Asset-Based Long-Term Care Insurance Policies
- The first type of Asset-Based Long-Term Care Insurance policy operates like a traditional long-term care insurance policy. You qualify for benefits if you need assistance with two activities of daily living: bathing, dressing, eating, maintaining continence, toileting and transferring. You can also qualify for benefits if you have a cognitive impairment like Alzheimer’s or Dementia.
- The second type of Asset-Based Long-Term Care Insurance policy is more flexible. To qualify for long term care insurance benefits, all you need is for a doctor to confirm that you need assistance and have a chronic condition.
Both types of asset-based long term care insurance policies are permanent life insurance policies. You can pay single premium, ten-pay or life pay. One reason these policies are popular is because, in certain situations, you can guarantee that the premiums will never increase.
Generally, the monthly long-term care insurance benefit is anywhere from 2% to 4% of the life insurance benefit. The amount of long-term care insurance benefit you use is subtracted from the life insurance benefit and that is what your heirs or estate receives.
Some Asset-Based Long Term Care Insurance policies offer full return of premium after premiums have been paid for five years.
Some Asset-Based Long Term Care insurance policies also have an Extension of Benefits option. An Extension of Benefits option allows you to increase your benefit payments for an additional 2 or 4 years, extending your total benefits up to a maximum of 7 years.
Long-Term Care insurance benefits can be paid on either a cash indemnity model or on a reimbursement model, depending on the Asset-Based Long Term Care insurance policy.