Q&A with Bob Loomis, long term care insurance agent with Robert Hensley and Associates in Avon.
Q. You have been selling long term care insurance for more the 20 years and were the initial agent chosen to be on the Insurance sub-committee for the Connecticut Partnership for Long-Term Care. What is the future of long term care insurance with regards to health care reform? Will it still be needed?
A. More than ever. The health care reform includes Title VIII: Community Living Services and Support (CLASS) Act. It’s a big unknown. Supposedly it will provide only $75/day for facilities and $50/day for home care. Only those working can opt in and one has to pay premium for 5 years to become eligible for benefits. The earliest we will know specifics and premiums is 2012, probably later.Â
The government wants you to be responsible for your own care. Medicare funding is being cut to pay the cost of health care reform, and some doctors are opting out of Medicare. Consider getting LTC insurance now. These policies are very comprehensive and can be affordably designed.
Q. Should long term care insurance be part of business succession planning? It seems as if a catastrophic injury could destroy a business as much as a business partner’s demise.
A. Perhaps this could be made part of a buy/sell agreement. If a person becomes benefit eligible under a long term care policy, the succession could be triggered. However, long term care insurance cannot fund a buy/sell agreement. It’s definitely something that all business owners should consider, for their own and their family’s, peace of mind and financial protection.
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Q. When should people buy long term care insurance? What is an ideal age?
A. The sooner the better, my wife and I got policies in our 40’s, when we qualified for “preferred” rates. Spouses and partners applying together get substantial discounts. Procrastination leads to higher premiums due to age, health issues (possible declination) and future policies with substantially higher premiums. It’s not necessary to buy a “one and done” policy. Many folks buy a “start up” policy. “Some” coverage is better than “none”. For instance, $100-$150/day makes it more affordable to receive care where you want to be, at home. Later on, people can purchase a supplemental policy (subject to insurability).Â
Q. Is this insurance that only wealthy people can afford? After all, it’s not an insurance based on income. Unlike life insurance, you can’t buy different levels of coverage can you?
A. You don’t need to buy a huge policy. Many nursing homes in Connecticut are over $400/day. People want to stay at home where spouses, partners, family members, and friends can assist in care needs. Policyholders are pleasantly surprised to realize the affordability of smaller policies. This coverage is even more flexible than life insurance. A person can tailor the plan to meet their needs; couples can have different benefits levels. Â
Q. What misconceptions are out there about long term care that you encounter?
A. Too many people think these LTC policies only provide benefits in a nursing home, saying “I’m not going to a nursing home.” Benefits also include Adult day care, assisted living facilities, certain home modifications and more. People think “the State will take care of me.” They don’t realize the consequences and penalties that can occur should they hide or transfer assets before applying for Medicaid. If you want the independence to decide where to receive care, you should have a long term care policy or lots of money. Bottom line; you don’t want the State to take care of you and make your decisions for you. A third misconception is procrastinators believe they can always get this insurance later, for instance in five or ten years. Too many of them became uninsurable. I highly recommend that those considering long term care insurance, learn how comprehensive these polices are, how affordable they can be, then decide.
Q. How far back do the underwriters look at your medical history? If you had skin cancer six years ago, is that going to preclude you?
A. There are some conditions that are uninsurable, but a condition like cancer can be looked at sometimes after only 12, 24, or 36 months depending on the type of cancer and the treatment. Generally speaking, the insurance companies will look at all history in the past 10 years, will review medications taken, height and weight, and medical records from treating physicians. There are also cognitive tests used by the insurance company, either in person or by phone. Certainly not everyone will qualify, but that’s why we say to apply early, at a young age, when you are less likely to have medical conditions that will preclude coverage.
