Archive for July, 2011

Should You Ever Replace Your Long Term Care Insurance Policy?

July 27, 2011

Only if it places you in a better position than you were.  Compare the costs carefully.  Make sure the policy benefits are comparable.  Most of the time, it is not to your advantage to replace an existing policy.  People are sometimes advised to replace their long term care insurance policies with newer, more up-to-date versions.  Be careful.  If your policy is more than a few years old, replacement seldom makes sense for the following reasons:

1. You are older than you were when you purchased the original policy.  A major determinant of policy cost is your age when you apply.

2. About two years or so, insurance companies have introduced new policy series (versions)…almost always with higher premiums than the series before.

3. You make have had a new illness diagnoses or worsening of an existing medical problem since you applied for your current policy.  The underwriting rules for a particular company could have changed (this happens often).  Any of these  events could place you in a less favorable class (hence more expensive) rate class..

Most of the time this adds up to a significantly more costly new policy.  Before going any further, make sure that you are being shown an “apples to apples” comparison of policy benefits.  If your current policy has inflation protection, pay particular attention to what your policy benefit amounts have grown to.  Then make sure that the proposed new policy starts with these “grown to” levels. 

What to do if your current policy benefits are inadequate?  First look at complementing your current benefits with an additional policy.  For example, your existing policy may have only a daily benefit of $120 but you need $220 per day to keep up with current service costs.  Look at adding a second policy (preferably from a different insurance company) with a $100 daily benefit.  The combined cost of the two policies will usually be less than that of an entirely new policy with a $220 daily benefit amount.  A second policy can often be designed to improve combined inflation protection, again often at lower cost than replacement.

A question that came up several times during my recent Denver Senior Law Day presentations concerned older policies that cannot qualify for the Colorado (or other states) Long Term Care Partnership*.  Yes, Partnership is a good benefit, but is it worth doubling your long term care insurance premium?  Once again, probably not.

Before allowing yourself to be persuaded to replace an existing long term care insurance policy, it is in your best interest to:

1. Carefully compare the benefits of the old and new policies.  Make sure you will not be paying more for lesser benefits.

2. Analyse whether you could achieve the same benefits at a lower combined cost, by adding a second policy with benefits tailored to your long term care planning goals.

3. Make sure the illustrated premium of the proposed new policy (either for replacement or for an additional policy) is based upon your present medical history. 

4. Most important: If you do decide to replace your existing policy, do not cancel it until you know that your new policy application has been approved…or you could find yourself with no coverage at all.  Surprises are sometimes discovered in medical records during the underwriting process.  

* The Colorado Long Term Care Partnership says that with a Partnership-qualified policy, you can become eligible for Medicaid while retaining more assets.  Please see the October, 2010 Personal Edition (click on “Archive” in the left column of this eNewsletter) for more detailed explanation.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term insurance policies vary from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2011

What is a Geriatric Care Manager?

July 27, 2011

…and why am I writing about yet another profession?  In 1999, when my Mom was diagnosed with lung cancer, I didn’t know what to do.  She was in northern New Jersey, I was in Denver and neither of us was going to relocate.  Mom was about to be discharged from the hospital but only if arrangements had been made to care for her at home.  Debbie Reinberg (Some of my readers may know her…she is an eldercare mediator with Elder Resolutions here in Denver) refered me to a geriatric care manager near my Mom’s home.

After a short, two-way interview, I hired Connie over the phone.  Connie met with my Mom in the hospital the same day.  After assessing my Mom’s care needs, Connie called me with the news that if Mom was to stay at home, she would need a 24/7 home health aide.  Then Connie walked me through the alternatives and referred me to a local home care agency…which I subsequently engaged.  Throughout my Mom’s eighteen month battle, Connie was my eyes and ears on the ground.  First, we had to change oncologists and Connie was there to guide me through the process.  How do do find the right oncologist from 1,800 miles away?  Then there were electrical problems in the house.  Connie found an electrician.  Family dynamics got in the way of Mom’s care.  Connie handled them in expert fashion and without ruffling anyone’s feathers.  Mom needed a “stair chair” as she became weaker.  Connie found one and had it installed on a weekend.  The list goes on and on.  Through it all, Connie kept me apprised of Mom’s condition.  If not for Connie Rosenberg’s help, I would have been on an airplane to New Jersey every week.

So that is what geriatric care managers do.  Most come from nursing or social work backgrounds.  While anyone can call themself a geriatric care manager, members of the National Association of Professional Geriatric Care Managers must meet high ethical, academic and hands-on experience requirements.  They also must adhere to the Association’s Standards of Practice.  How do you find these remarkable professionals?  The National Association’s website is www.caremanager.org.  You can plug in the city or zip code for your loved one’s location.  I just did a search and found eleven member geriatric care managers within 25 miles of Denver, CO. 

Most long term care insurance policies do not pay for an independent care manager.  A few do.  It doesn’t matter.  A family member or close friend needing long term care can quickly become overwhelming.  There are so many important decisions to be made so quickly.  For your own sanity and the well-being of the person needing care, please engage the services of a geriatric care manager.  It will be worth every penny.

Note: I am not affiliated in any way with the National association of Professional Geriatric Care Managers.  They don’t even know that I am writing this article.

Disclaimer: Actual policy language, rather than the contents of this eNewsletter always takes precedence.  Long term insurance policies vary from company to company & within the same company.  Raymond Smith, The Long Term Care Specialist, does not give legal or tax advice.  Consult your tax advisor or attorney for these matters.

 

© Raymond Smith, The Long Term Care Specialist, 2011