| Since her
mother was a widow, Suzanne encouraged her mother to purchase
a policy. Four years later, her mother suffered a
stroke and required daily help with personal care and meal
preparation.
Since Suzanne was working and raising
her son, she was unable to provide the care her mother
needed.
| However, a care manager from
the long-term care insurance company recommended that
Suzanne’s mother move
to an assisted living facility in a residential setting.
The expenses were covered by her mother’s long-term
care policy. Suzanne and her mother planned ahead and
avoided a costly situation by having a long-term care
policy in place when it counted.
Cost of long-term care is
expensive: A quarter
of Americans approaching retirement age do not know
the cost of nursing home care. Only 15 percent
can identify the cost within 20 percent of the national
average monthly cost, $4,654. The cost of being ill
for a long time are sky- rocketing. Approximately
one sixth of all individuals who are now 18 years
old can expect to spend two and a half years in a
nursing home at a cost of $100,000. Statistics show
that 72 percent of people admitted to a nursing home
become penniless within the first year. Unless you
have enough assets to spend about $30,000 a year
on long-term care, your life style could be severely
affected without financial protection.
Disability coverage
doesn’t
provide long-term care:
Disability insurance coverage replaces lost wages if
you can no longer work. Those payments may be enough
for normal living expenses, like food and housing.
Disability coverage wouldn’t be enough to also
pay for long-term care, such as home health care, adult
day care, assisted living facilities, an alternate
care facility or a nursing home. Medicare and private
health insurance plans cover medical expenses and are
not meant to cover long-term care costs. When disability
strikes growing families, other long-term goals, like
saving for college or retirement, can be adversely
affected.
Disability doesn’t
respect age or timing: An accident or illness
may strike any person at any age and at any time. Every
ten minutes, 350 people
suffer a disability injury due to an accident. And,
almost 20 percent of the U.S. population – approximately
49 million people – are disabled. This includes
people of all ages, not just the elderly. An automobile
accident, cancer, Parkinson’s Disease, a stroke,
multiple sclerosis or other maladies can happen without
warning.
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Some of the aspects of
long-term care coverage
Long-term care coverage includes
several options to meet your budget and expectations.
Here are a few of the most common benefits:
•Daily benefit
amount
You may choose a plan to pay up to either
$100/day or $150 /day for care at a nursing
home or alternate care facility. The options
also provide $60 /day or $90/day for community-based
health care.
•Lifetime
maximum
A lifetime maximum translates into the total
dollars you can receive in benefits. It
depends on the maximum daily benefit amount
for nursing home care that you choose.
The Christian Brothers Employee Benefit
Trust offers a two- year or five-year option
for coverage payouts.
•Care assistance
You might find it helpful to have a qualified
professional help you explore and understand
your long-term care alternatives. After
an initial assessment, an individual plan
of care is designed specifically for your
care needs. A long- term care pro- fessional
will help identify appropriate care providers,
negotiate charges and monitor the care
plan, if requested.
•Inflation
protection
You can choose a plan that automatically
adjusts the daily benefit amount by five
percent each year that you keep the coverage.
As the cost of long- term care increases,
your daily maximum benefit increases too.
For example, with automatic benefit increase,
a plan with a $100 daily benefit would
pay more than $240/day after 20 years,
compared to a guaranteed benefit of $100/day.
•Fixed premiums
Premiums are based on the fixed daily benefit,
the length of coverage and the age at the
time the coverage begins. The younger you
are when you enroll, the lower the premiums
are for the duration of the plan. Once
you join the plan, your rates are fixed.
You can never be singled out for a rate
increase because you get older, become
ill or file
claims. As long as you keep paying your premiums
and you haven’t received benefits up
to your lifetime maximum, your coverage cannot
be canceled.
•Family coverage
You may purchase long-term care coverage
for a spouse, parents, grandparents, and
in-laws, so that
they can have protection, too. |
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About one-fourth of American households
are providing informal care to a friend or relative. Nearly
forty percent of people receive long-term care are working
adults between the ages of 18 and 64.
Employer-sponsored plans
A group long-term care plan that is sponsored by an employer
can provide long-term care coverage at affordable premiums.
Buying long-term care coverage now can lock in rates and
keep costs lower when compared to purchasing coverage when
you’re older. If you buy coverage now, you can keep
it for life, wherever your career takes you.
Who offers long-term care?
Long-term care coverage is available through several sources:
individual policies, employer-sponsored group plans and
association policies. The Christian Brothers Employee Benefit
Trust offers an employer -group plan for employees of Catholic
organizations. The coverage is provided by CNA Financial
Corporation, one of the pioneers of long-term care, which
has offered this coverage since the 1960’s.
Christian Brothers Services offered the long-term care benefit
to its employees on a voluntary basis. After an organized
educational program, 49% of its employees enrolled during
the open-enrollment week in April 2001. The company made
it possible for its employees to buy good coverage at an
affordable premium.
Should you obtain long-term care coverage?
Long-term care coverage may not be for everyone. If you can’t
afford the premiums, have limited assets, are living “on-the-edge” financially
or have Social Security as your only source of income, you
should not purchase a policy. However, if you have significant
income and assets and want to protect them, or if you want
to stay independent of the support of others, a long-term
care insurance policy may make sense.
Who to Contact
If you’re interested in learning more about the long-term
care coverage offered through Christian Brothers, please
call or email John
Airola at (800)807-0100 ext. 2450.
You can also read a comprehensive
report, “A Shopper’s
Guide to Long-Term Care Insurance”, published by NAIC
(the National Association of Insurance Commissioners.) You
may obtain a copy at a minimal cost by calling NAIC at (816)
842-3600.
by John Airola, Managing Director, Employee Benefit Services
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