Frequently Asked Questions - Long Term Care Insurance

1. If you purchase some form of LTC insurance and never need it, you and your family will be very glad you did not need it.
2. If you purchase LTC insurance and you need care, you and your family will be very glad it was purchased.
3. If you do not purchase LTC insurance and you need care, you and your family will desperately wish you had!

Return of premium rider are available on traditional or stand-along long term care policies.  With linked benefit polices, the underlying life insurance or annuity would go to your heirs.

Many carriers do have different underwriting requirements during COVID-19 pandemic.  

Some life insurance applications are eligible to be issued without any lab work.  

Some ages, and health history will require the applicant to wait until after COVID-19.

Even so, education can take place now while you are at home.  We can look at your heath history and what insurance you are considering and then advise when application can take place.

We have two insurance companies that may consider you, if you only had a single episode, non-smoker for 12-36 months, no atrial fibrillation nor diabetes, no limitations.  Underwriting parameters do change, so contact a LTC Planning Specialist with Baygroup Insurance to find out if you are insurable.  We can pre-screen the risk before taking any application with an insurance company.  Have information is key to making a sound financial decision.

You have 30 days from the day you receive the policy to examine and return it to the insurance company.  You can return it for any reason. Simply return it to the insurance company, or to the agent, producer or office thorugh which it was bought.  The insurance company will refund the full amount paid for the policy within 30 days of return. The policy will then be void from the start; and you will not be insured under the policy or entitled to any benefits.

When you are preparing to hire a home health care organization, call a few and compare the answers to these questions.  This will protect you and your loved ones from potential liability. Also, if you have a long term care insurance policy, check with the claims department at the insurance company to be sure that the company your are planning to hire will meet the requirements of your policy.  Otherwise, you may incur unnecessary out of pocket expenses.  How to file a LTC Insurance Claim.

Write note to the insurance company noting the name of the insured (policyholder), date of death and policy number.  Attach a death certificate.  You can submit these to your insurance broker for processing.  That way, communication with both is taken care of and the insurance broker can follow-up to see that the unearned premium is returned to the estate. 

Perfect health is not required.  If your health conditions are controlled, no current physical therapy or procedures recommended not performed you may health qualify.  Some conditions are not insurable for traditional long term care insurance, but may insurable with a linked-benefit (combination long-term care product) or life insurance with an accelerated death benefit or a medically underwritten immediate annuity, if you are currently receiving care.  To provide you with specific information to meet your needs contact a LTC Planning Specialist.  

Long term care insurance enables your family to supervise your care, rather than provide the care.  Their emotion and physical wellbeing is maintained.  Families do not always live near-by, nor are they necessarily able to dedicate time and money to provide the care.  Long term care insurance provides benefits to modify a home, to enable you to receive care at home if you desire to do so

Long term care insurance provides a stream of income to pay for professionals to help keep you at home, if that is where you prefer to be, or an assisted living or nursing home when needed, without a tax consequence. Without insurance, retirement assets, marketable securities or real estate  may need to be converted to cash resulting in a taxable event and possible loss due to market.  By reallocating resources to pay for care, the retirement income continues to fund your lifestyle and your financial commitments.  It also helps to preserve your financial inheritance to your family to maintain their lifestyle.

A financial plan includes future cost of health care.  This is a significant expense in today's dollars and even more so when inflated for future cost of care.  By having long term care insurance fewer of your retirement assets need to be earmarked "just in case" you need care.  This will enable your asset to be more effectively invested or used for other purposes such as: travel ....  

Long term care insurance enables your family to supervise your care, rather than provide the care.  Families do not always live near-by, nor are they necessarily able to dedicate time and money to provide the care.

Long term care includes a variety of services that help people when they are no longer able to care for themselves, regardless of age.  The care is provided over an extended period of time and may be medical or personal.  Personal care, which involves basic life functions referred to as Activities of Daily Living (ADLs), includes assistance with bathing, dressing, feeding, transferring, toileting, and continence.  It also includes care when needing assistance to protect oneself from threats of health or safety.  One may be able to physically perform the activities of daily living but need to be reminded to do so.  An example of this cognitive impairment would be Alzheimer's Disease.

     Myth:  Long term care means a complete loss of independence and control over your life.

     Fact:  With proper planning, long-term care costs can be addressed effectively ensuring maximum independence and control.  

Each insurance company has different requirements for employer paid and voluntary groups.  Some have a fixed number of applications required and others it is a percentage of employees.  For more details contact Baygroup Insurance.

The tax benefits are based on how the entity reports to I.R.S.

Tax Information for Self-Employed Individuals, Partnerships, LLC, S-Corporations

Self-employed individuals, including sole proprietors, partners and more than 2% shareholders of an S-Corporation, are permitted to deduct 100% of the eligible, age based premium under tax qualified LTC plans.  Qualified LTC Premiums are treated as health insurance premiums and are permitted to be deducted for the taxpayer, his spouse, and dependents. (IRC Section 162 (1)).

C Corporation

The full amount of employer paid long-term care insurance qualifies as an accident and health plan within the meaning of IRC Sections 105(b) and 106.  This means that the premium is fully deductible.  An employer may select which employee's premiums the company will pay.  Discrimination rules do not apply.

Some states also have tax deductibility or credits available.  Contact Baygroup Insurance for details.

To establish a voluntary group, a full census of all employees, whether being offered coverage or not, must be submitted to the insurance company with request form specific to each company.  Approval by the insurance company of a voluntary group is required to obtain a group discount.   

If the employer pays for coverage, there may be an opportunity to have fewer health questions.  

Policies pay for qualified long term care cost based on the contract.  The basis can be cost-Incurred Benefit/Reimbursement Plan or Indemnity Benefit or Cash Benefit

A cost incurred benefit reimburses actual expenses up to the stated daily or monthly benefit amount.

An indemnity benefit pays the insured a stated daily benefit each day an approved long term care service is received. 

A cash plan pays the monthly benefit at the beginning of the month or end of month based on contractural language in which the insured qualifies for benefits.

Access to Policy Benefits (Benefit Triggers)

Tax Qualified Policies require certification by your licensed health care practitioner that you are chronically ill, meaning that substantial (either hands-on or stand-by) care is needed and is expected to last for at least 90 days.  There are two ways to qualify for benefits:

Activities of Daily Living (ADL) — you require help with at least 2 activities of daily living, such as eating, bathing, dressing, transferring, toileting or continence.

Cognitive Impairment—you are certified by your licensed health care practitioner as needing assistance to protect yourself from threats of health or safety.  You may be able to physically perform the activities of daily living but need to be reminded to do so.

Find out what the cost of care is across the United States by reviewing Cost of Care Study.  You can see what the cost of care is in three different city/state combinations not only today but in the future.  It is important to know the cost of care today, but also in the future when you may need care.  The benefit level you select in designing a long term care should take into account the future cost of care.

One carrier has a minimum of 100 eligible members, other carriers have requirements for new applications on an annual basis.  For current available offerings contact Baygroup Insurance.

Requirements vary with insurance company, here is an example:

• Have a Constitution or Charter and bylaws
• Be formed for purposes other than the sale of insurance
• Have been in existence for at least two (2) years
• Have an independent operation with its own board of directors, conducting documented board meetings and an annual meeting of association members
• Have (at least 100) dues paying members who have affirmatively joined the association
• Have a true affinity relationship between the organization and its members
• Offer a wide array of membership benefits such as fellowship, education/training, newsletters, metings/events/activities, advocacy or community services. It may also offer commercial benefits such as travel discounts, bank and or other financial services offers and discounts, coupon offers,prescription drug or health related discounts, etc.

For more information contact Baygroup Insurance long term care planning specialist.

You can contact Baygroup Insurance.  We will educate you so that you can make an informed decision.  We will help you design a plan that meets your individual needs.  

Long term care insurance protects against the cost of care resulting from an injury, illness, accident, development of a chronic condition or the fraility that comes with aging.  Costs occur when either facility care (nursing home or assisted living) or care in the home or in the community (home health care or adult day care) when paid caregivers are needed. 

The cost varies with each person. It is based on state of residence, age, health and benefits selected. To obtain specific pricing, contact a long term care planning specialist with Baygroup Insurance.

Long-Term Care insurance has many options and riders that will affect the premium you pay.  It is best to talk to an expert to discuss what benefits are most important to you.  Some of the options that can be selected are as follows:

• monthly or daily benefit level (how much your policy will pay per day or month when you need it),
• inflation factor (you can choose from several options, including but not limited to 5% compound, 3% compound or no inflation),
• benefit period or benefit mulitplier (the length of time that you could collect benefits if you had qualified long-term care expenses for the maximium amount each day or month),  
• elimination period
• plans design - individual policy or a shared plan for two spouses/partners
• survivorship

Premiums are based on your age, health and benefits selected.  You can tailor your policy design to meet your budget and coverage needs.  Baygroup professionals will simplify this and help you decide what you need. Please contact us or call us at 410-557-7907 to discuss policy features and your health eligibility.

We can provide you with a quote for Long-Term Care insurance.  You fill out a quote request form and email it to us, or print it out and mail it to:

Baygroup Insurance

3815 Justin Road

Monkton, MD 21111

Please let us know the best time to contact you and how you would like to be contacted, by phone or by email.  Additionally, you can call us for a quote at (410) 557-7907. 

Yes.  As with traditional long term care insurance (LTCi) products, combination LTCi products are medically underwritten.  This means that your health status will affect your rating for these products.  You will want to apply for a combination product at an age when you are in good health!

Many long term care combination insurance products require a single premium payment.  This means that you would pay the bulk sum at the beginning of your policy, rather than writing monthly or annual checks.  Combination long term care products can range in prince, anywhere from around $25,000 to over $200,000.

Many of these combination products require a single premium payment, rather than many monthly payments or annual payments.  Some people purchase these products because there is a one-time payment and no chance of a future rate increase.  If you have a chunk of money that you are able to put toward a single premium payment you might consider a combination product, if you also need life insurance.  It would not be a good idea to purchase a combination product if you already have enough life insurance or if you do not have a need for it.

No matter what happens you will receive money from the policy.  The policy will either pay for long term care expenses, pay your estate or beneficiaries a death benefit, or you can have your premium payment refunded at any time.

It is a good idea to consider a long term Care insurance (LTCi) policy to supplement VA long term care benefits.   Qualification is based on level of service-related disability and financial aspects.  For example, if a veteran is under the age of 65 and lould like to use the LTCi benefit, he or she must have evidence of being totally disabled.  There are limitations to assets a veteran is allowed to have while receiving this benefit.  In addition, there are limitations to home care that qualifies for benefit.  If the veteran is healthy, but has a spouse that requires long-term care, the available benefit is reduced.  For more details visit this page from the Department of Veterans Affairs.

Long term care insurance (LTCi) and disability insurance (DI) both help you protect your assets, but they serve different purposes.

Disability insurance replaces a portion of your income lost due to an inability to perform your job.  The qualifying disability may be job or task specific (unable to perform your particular job) or general (unable to perform any job).

Long term care insurance pays for a portion or all of the costs of caregiving needed due to physical or cognitive disability. LTCI will reimburse costs for care received at home or at assisted living or skilled nursing facilities. Policies may have a provision that a stipulated amount will be paid for any day that qualified care is required (Indemnity) or for any month during which qualified care is received (Cash).

The younger you are, the healthier you are, the lower the cost. Keep in mind that the cost of long term care insurance (LTCi) coverage will increase as the you age. When you are younger, you are more likely to be in good health.  If your health is good, you could qualify for a preferred health discount.  According to the American Association for LTCi, the percentage of LTCi applicants qualifying for good health discounts in their forties is 42%, in their fifties is 32%, and in their sixties is 21%.

American Association for Long Term Care Insurance, 2012-2013 LTCi Sourcebook, www.aaltci.org

Some insuance companies are already introducing gender-based pricing, which reflects women using benefits more than men.  If unisex rates are still available in your state, it will probably be a better value for you to buy before gender pricing is introduced.   

If you can afford a small policy now, consider doing so.  Your health is known now, pricing will be at your current age and the product features offered today will not necessarily be the same in the future.  You can use multiple policies when you need care.  For more information, contact a long term care planning specialist with Baygroup Insurance.

Baygroup Insurance has over 40 years of combined experience in the Long-Term Care insurance (LTCi), life, disability, and health insurance markets.  Baygroup Insurance is a brokerage, which means they offer a selection of top insurance carriers to choose from.  They have sold over xxx LTCi policies. Their track record on service and follow-through are second to none.  LINK TO TESTIMONIALS.   Baygroup Insurance makes educating prospective clients a priority so that they can make an informed decision when purchasing insurance products for themselves and their families.  

Within the group, Melissa Barnickel is a CPA as well as having a CLTC (Certified in Long-Term Care) designation.  With her financial background she is able to pick up where many agents leave off.  Her overall accounting knowledge helps clients feel comfortable with their financial decisions.  When prospective clients leave a meeting with Melissa, they have a better understanding of what LTCi is and how it provides the funding for a long-term care plan.  Melissa also educates and assists her clients with their health, disability, and life insurance needs to meet their financial goals. 

Ed Hutman has a CLTC designation.  Ed has a knack that allows people to truly understand the impact of not planning for a long-term care event and the details and options offered with LTCi. Ed has knowledge and experience with groups that have offered LTCi to their employees as a benefit option.  When working with Ed, employers and individuals gain an understanding of how LTCi will benefit them.  Ed also helps employers and individuals gain understanding about health, disability, and life insurance products.

Insurance provides the cash flow to pay for professionals to provide care in a variety of settings. Family members maintain their emotional and physical wellbeing by supervising the care rather than providing the care.  Retirement income can continue to fund the lifestyle planned, as opposed to setting aside funds, "just in case" an extended care event takes place.  Insurance also preserves financial commitments to family members.  

As with any significant purchase, doing your research and homework is the key to buying a plan that fits your needs now and in the future.  Consider the following:

1.  Where do I want to live as I age? - (At home, assisted living, geographically)

2.  What plan options are important to me? -(Number of years, survivorship for couples, shared benefits for couples, coverage, elimination period, inflation)

3.  What is the financial strength of the carrier? - (The likelihood that they will be in business when I need my policy)

4.  What benefits should I select?-  What makes sense considering your family health history,  personal, career and financial goals?

5.  How does this fit into my budget and my benefit needs?- (Consider the premiums for coverage)

6.  Work with a knowledgeable long term care insurance specialist or financial agent- Check out our history and experience!  We will discuss your health history, budget, and desired benefits and help you select a plan that is a good value for you. Your plan will protect your family, retirement income and your financial commitments to your surviving family members.

7.  Diversity of the carriers and policies offered by the brokerage- This can eliminate a lot of leg-work if you choose a brokerage with a selection of desirable carriers.  Baygroup is current on industry changes and offerings, with a wide selection of desirable insurance carriers.

Insurance companies reserve the right to increase premiums through the life of the policy, depending on the overall claim costs, investment earnings and persistency of policies remaining in force. State Insurance Departments must approve all rate increases in respective states.

Medicare and Major Medical health insurance in general pays for hospital and doctor bills, for acute care or conditions and the recovery period.  Health policies do not pay for custodial or personal care.  Custodial care includes help with daily tasks such as eating, getting out of bed, toileting, bathing and remembering to take medications.

Medicaid will pay for long term care expenses including custodial care, but only after you'vequalified by paying down your assets to state mandated levels  (generally $2,000 to $3,000) for an individual.  The well spouse may keep 1/2 of the combined countable assets up to Federally mandated maximums (currently $113,000).

Social Security provides income for day to day expenses but is not adequate to pay for long term care expenses.

The more pertinent question is can I afford not to have long term care insurance (LTCi)? 

We purchase life insurance, car insurance, and health insurance and hope we never need to file a claim, but we own these policies because we think "what if we do need to file a claim?"  The impact of not having these insurances can be devastating to a families financial health and well being.  

Consider this questions:  What is the impact on my family if I get sick and need long-term care? Remember you don't have to be old to go on claim.  A devastating accident or disease may take a patient months or even years to heal and the financial and physical burdens it places on ones family can be huge.  This type of insurance may be the difference between your family staying in their home and loosing their home.  Also consider that the average cost of a home health aid is between $18-$25 per hour.  Nursing home and rehab facilities bill out anywhere between $200-$400 per day.  There will even be physical and emotional costs for those that are lucky enough to stay in their home or with family members- not to mention lost income for loved ones that take time from their career to care for you.  

LTCi is customized insurance.  A policy that fits your budget and care level needs is better than no policy at all.  When faced with the staggering cost of long term health care, a LTCi policy is a great defense to protect your family and your assets.

The daily or monthly benefit that the policy would pay for long term care expenses vs the amount you would pay out-of-pocket.  The elimination period (or deductible) - how long you would pay for long term care services before the policy would pay and inflation rider, if appropriate.  Other riders can enhance the benefits when on claim, such as survivorship, shared care, waiver of elimination period. You can find definitions in our glossary.

Long term care insurance (LTCi) will cover in-home care, assisted living, adult day care, and nursing home needs. 

Most people would rather stay in their home as they age.  LTCi policies can postpone or even eliminate the need for nursing home care. Quality of life is enhanced when a policy holder and their family has options and control over their life.  Coverage can be "right sized" to meet most budgets.  It is the private sector's solution to the serious costs of health care for the aging population.

No one has a crystal ball that predicts their future.  We all hope we will not need long term care.  Look at your family health history.  Check out your immediate family structure. Ask yourself direct questions.  When did your parents die and what type of health issues did they have over the last 10 years of their life?  How old are your children or siblings and where are they in their life curve? Most likely your children will be in the prime of their life and careers and is it fair to ask them to take care of you? Maybe a better alternative would be to have them manage your health care because you have long-term care insurance. Additionally, look at the assets you have accumulated over your life - do you want to protect your assets for your spouse or family?  Long term care insurance helps preserve your wealth.

Federal and many state tax codes offer incentives for the purchase of long term care insurance (LTCi). Take a look at the LTCi tax rules, published by the American Association for LTCi for a discussion of tax benefits when purchasing LTCi.  If you have further questions contact us or your tax professional.