Monday, April 20, 2009

Is Long Term Care Insurance Worth The Price?

That depends. It seems to me that if you've seen one long term care policy (ltcp), you've seen just ONE. While many of the features are becoming more standardized among insurers, there may still be important differences in benefits from policy to policy.

Here's what happened with my mother. She had a bias against anything that contained the words: "nursing home." Not an unusual bias among aging loved ones. Anyway, Mom decided to let a salesman sell her a home care policy, one that limited benefits to services delivered to her in her home. In return for a rather substantial premium (she was in her 70's when she purchased this policy--a time when premium rates become exhorbitant), Mom thought she'd receive skilled nursing care, PT/OT/Speech, custodial, incontinence, and related services (if she ever needed them) IN HER HOME.

Try as I might to persuade her to buy a broader policy for only a litte bit higher premium, she balked. "I'm never going to a nursing home," she said. "So why pay for something I'll never need."

Fast forward a few years to when Mom, in the early flowering of her dementia, moved into a home for the aged. Not a nursing home, but congregate housing for seniors. Gradually her ability to independently dress, toilet, be medication compliant, transport herself, and so forth, decreased and she needed fee for service assistance from specialized caregivers. Guess what? After years of paying premiums, her insurer refused to pay for these services. Why? They took a very narrow definition of the word "home" and decreed that a "home" for the aged did not qualify. To collect on her policy, Mom would have to be housed in her own house.

Turned out there was nothing we could do. I complained that her "home for the aged' was, in fact, her current home and that it was not a nursing home. The insurer didn't care. They had fond a loophole to avoid paying and they weren't going to budge.

The lesson, of course, if you are interesed in "ltcp's" for yourself or a loved one is to carefully read, analyze and compare policies from many insurers, and especially to study the small print. Easier said than done but not impossible. Very time consuming, but well worth the time.

This kind of coverage is not for everyone. There are some good sources of information on the web, in Consumer Reports, and elsewhere that will help you decide if it's right for you. My message, though, (and my mother's, if she were able to do it over again) is to be very, very careful and to make sure you know exactly what it is you may be buying. As with everything else, let the buyer beware.

Bob Tell
Author, "Dementia-Diary, A Caregiver's Journal"


Howard Schoem said...

My father was the victim of a stroke. This proud WWII vet would rather have perished than have my sister or I perform functions the family caregiver provided. I say, "family," caregiver as that is what she became, one of us. Long Term Care insurance allowed my father to protect his dignity, preserved his family's assets for my mother's use and allowed my sister and I perform our daily employment or parenting functions. The stress reduction experienced by the entire family was profound. Today I actively promote Long Term Care Insurance. I am eager to educate as many as possible about LTC, its power to fulfill a positive life altering experience for an entire family as it ages.

Bob Tell said...

Thanks for your comment, Howard. You are right of course, and that's why my wife and I have LTC insurance too. But, again, the coverage can differ enormously depending on the insurance company, and so can the integrity of the insurer. A good friend who has been paying premiums for years just told me that his insurer, after raising his LTC premiums every year for over a decade, just announced unilaterally that his lifetime coverage has been reduced to 4 years. It's the same company that betrayed my mother. That's why I stress doing due diligence in selecting a company and a policy for yourself or a loved one.

Bob Tell
Author, "Dementia-Diary, A Caregiver's Journal"

Howard Schoem said...

Excellent point Bob and a darn good reason to get a referral to an experienced insurance professional who can speak to past carrier behaviors. The captive agent represents one particular carrier, the independent agent represents a litany of carriers. I believe this to be optimal for the potential client. The insurance industry is mostly regulated by individual states. I can tell you Florida has some pretty strict rules regarding premium hikes and such. It does happen but if the insurance company wants to increase costs they need to do so to an entire class of policy holders. This exposes them to a potentially harmful public relations event. It does happen but not very often with reputable carriers.

Long Term Care Insurance Alabama said...

I concur to your answer that it depends if a long term care policy worth the price. But usually it is true. Not everyone suits the long term care insurance. Thank you for providing enough information about this topic.

commercial property insurance said...

Hi Bob
really a good post and discussion but i always agree to the fact that preference of one policy to other vary from person to person and their situation.So if people do research and pay attention to all the facts then they can choose the best policy according to their requirements

Maylene Vidler said...

This is very interesting site. I really enjoyed to be reading it. Keep posting and sharing like this! Teenager auto insurance