Long-Term Care Insurances & Lifecare

The failure to consider the cost of long-term care is among the 10 most common financial mistakes an individual can make, according to Randall Billmeier, a Portland financial representative for The Northwestern Mutual Financial Network, who sites the Wall Street Journal as his source.

“Long-term care insurance, or LTCi, is a type of insurance policy that is triggered when an insured person loses ‘activities of daily living’ or ADLs,” explains Randy. ADLs are the basic tasks of everyday life such as eating, bathing, dressing, toileting, transferring and continence. “Specifically, when two of the six ADLs are lost, or when one suffers ‘severe cognitive impairment,’ benefits are triggered under a long-term care insurance contract,” says Randy. “Unfortunately, the loss of ADLs over time is a natural human occurrence. What’s unnatural is the huge cost associated with care as a result of that loss.”

Through the lifecare contract, Piper Shores assists residents with the costs of long-term care in a creative way. Residents pay a predictable monthly fee, and as part of that fee, they receive priority access to onsite assisted living and skilled nursing care at Holbrook, when needed.

Some Piper Shores’ residents elect to maintain long-term care insurance contracts once they move to Piper Shores. Approximately 50% of those with ‘good’ policies elect to keep them when they become residents. A “good policy” is defined as one from a large, reputable insurance company that has a short elimination period; has kept pace with the cost of medical inflation; provides coverage for assisted living, skilled nursing care and home health coverage; and has a relatively low premium.

At Piper Shores, a portion of the monthly fee paid by residents is allocated to healthcare expenditures. Accordingly, when a Piper Shores resident transfers to Holbrook for assisted living or skilled nursing care, a portion of the monthly fee may be reimbursable under a LTCi. Likewise, expenses incurred when a Piper Shores resident receives home health care in an independent living setting may also be reimbursable under an LTCi. It depends entirely upon the specific insurance product and policy.

Financial decisions about the costs of long-term care are extremely important. Both lifecare and LTCi provide prudent ways for an individual to plan for and manage those costs over time. Individuals should consult with their own financial advisors, insurance agents and their families when choosing the best way to manage long-term care costs.