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Long-Term Care Insurance Guide for Physicians 2024
What You Need To Know About Long-Term Care Insurance in 2024.
Long-term care planning is important in 2024, as it helps individuals prepare for the possibility of needing long-term care in the future due to aging, illness, or disability. With advantages for the possibility of needing long-term care in the future due to aging, illness, or disability. With advances in medical technology and increased life expectancies, the likelihood of needing long-term care is increasing. At M.D. Disability Quotes, we feel that the discussion of long-term care planning is an important aspect of financial and Extend Care Planning, and it is crucial for individuals to achieve their financial freedom.
What is Long-Term Care Insurance?
Types of Long-Term Care Plans
These are general definitions of products available in 2024. Please note, these could change with new legislation.
- Traditional Benefits
- Linked Benefits
Are hybrid, combo or asset-based policies that offer extended-care benefits usually with a Whole Life Insurance or Annuity base. This can cover a term of years or possibly pay for a longer duration, depending on the rider and product purchased.
Hybrid life and LTC insurance products combine a life insurance policy with “Living Benefits” for Long-Term Care. These products are also referred to as asset-based LTC or linked-benefit policies.
Common names of the policies with riders are listed below:
Life Insurance with a LTCI Rider via Universal or Whole Life Insurance.
Annuities with an LTC Rider allows for coverage but monthly benefits will depend on the cost basis.
Life Insurance with Chronic Illness Riders but this isn’t a true LTC policy.*
Life Insurance with Living Benefit Riders but this isn’t a true LTC rider.*
Life Insurance with an Accelerated Death Benefit Rider but this isn’t a true LTC rider.*
Get the Coverage You Need to Feel Confident About Your Future
Coverage and Benefits
It will cover expenses related to care because of being chronically ill. A properly certified person like a physician will need to deem you chronically ill because you need assistance to perform at least 2 of 6 ADLs.
Activities of Daily Living are considered:
- Using the Toilet
- Bathing
- Dressing
- Control over your bladder/bowel
- Being able to lift yourself out of the bed or chairs
- Severe Cognitive Impairment and you need supervision for protection
- Paying out of pocket
- Relying on Family Members
- Long-Term Care Planning via a Traditional LTC plan or a Linked Plan
Long-Term Care benefit types are either by Reimbursement OR Cash indemnity and is decided during contract selection.
Reimbursement means that it will pay out the daily or monthly allowable max benefits base upon submitted bills. Think of this as a way to do some bookkeeping through the process but could keep the costs of the premium down as well as stretch out the benefit pool because you only use what you need and the unused balances stays in the pool.
Cash Indemnity means that you can receive the daily or monthly benefit without having to show compensable services; you just need to be determine to ‘need’ the covered care and you can receive the daily or monthly maximum. This may be useful for those that expect a family member to care and these funds can be used to pay anyone.
To determine what style is best for you, please see the other sections to learn more about how to build a plan based upon your Individual needs and the needs of partners and parents.
Possibly. Chronic impairments are potentially qualified impairments as compared to acute is it is manageable. Chronic impairments are not curable but something that you live with. These conditions may be managed but you cannot cure them and aren’t always disabling.
Examples of chronic impairments are high blood pressure, arthritis, diabetes emphysema or atrial fibrillation. These are ongoing and may relate to Extended Care but not always.
No. Acute Impairments are an immediate health care need. Similar to a fall causing a bone or a heart attack. Accurate means it is happening NOW and that event needs skilled medical attention immediately. If you fall, you break your hip for example, you have to go to the hospital that’s an acute event. You need the skilled help of doctors, nurses therapists in the hospital to recover from that. But we expect with surgery hip replacement, for example, that you would recover
How do you know? Do you need medical attention now?
Care for an acute impairment presupposes that some degree of recovery is possible and is an expectation of the overall acute care plan. These acute issues don’t always result in needing Extended Care. Acute impairments and the short-term skilled medical treatments required are the primary realm of health insurance including Medicare.
Physical impairments and cognitive impairments are typically what triggers the need for Extended Care Planning.
Physical impairments are caused by one of the chronic illnesses or injuries above but can be managed with treatments or medications but cannot be cured. These compromise your daily routine.
Cognitive impairments are when the deterioration or loss of intellectual capacity, as certified by a licensed health care practitioner (whether by a doctor, nurse or licensed social worker) and is measured by clinical evidence and standardized testing.
This is sometimes known as memory or reasoning loss. Common causes are Alzheimer’s and late-state Parkinson’s diseases and other forms of dementia. Also can be caused by stroke, tumors or trauma to the brain.
These are otherwise known as ADLs. These are the six activities of daily living that are typical of our normal day. If 2 of these become a problem for a person and they otherwise need assistance to be able to perform these duties safely, that may be the trigger used to qualify a long-term care insurance expense. Typically, you need to be unable to do 2 of 6 to determine if someone is eligible for coverage.
According to the CLTC, the Six most common ADLS in extended care planning:
- Transferring: getting into or out of bed/chair
- Toileting: getting to and from/on or off the toilet with reasonable hygiene
- Bathing: the ability to adequately clean oneself in shower or bath safely
- Dressing: putting on or taking off one’s clothing
- Eating: getting prepared food into the body included via IV or tub Continence: maintaining bladder or bowel continence
Long-Term Care Insurance FAQ's
- Relying on Family Members
- Paying for Long-Term Care Out-of-Pocket (Self-Funding)
- Purchasing Individual Long-Term Care Insurance
- Purchasing Hybrid Life Insurance/Long-Term Care Insurance
- Government Programs like Medicare or Medicaid if at all
Most people hear about Long-Term Care planning and they immediately think of institutions like nursing homes, awful care and old people confined to wheelchairs. This follows the negative, emotional reactions to that often prevent us from thinking about doing anything at all about the fact that we age and will have health needs in the future. Whether you are in a state of pending legislation or are
These provisions include consumer protections relating to non-cancellability, unintentional lapse, minimum standards, disclosure, reinstatement and nonforfeiture, among other things — and provide considerable peace of mind for clients and financial professionals alike. They also establish rules for marketing these products, as well as training and licensing requirements for those who sell them
Due to the recent legislation through multiple states, like what happened in Washington State, please note that the underwritten LTC rider may be allowable for the exemption required to bypass the potential state mandated plans. To learn more about this, please read here. Some states may decline this option.
There is typically underwriting and a medical underwriting process although rules could be different through an employer-paid plan. Many are streamlined and some will offer couples discount if available on the product chosen.
If eligible, you may qualify for an accelerated underwriting program for certain LTC plans. This means that just a tele-interview would be required; no other labs, medical records to be reviewed.
Most often, traditional underwriting may include a personal interview, blood, urine and the request of additional records or testing such as EKG.
Would you like to see if you qualify? Please schedule a consultation with amber, CLTC® here.
Each carrier has their specific provisions on what is required for the product. It is always best to prescreen your health history (or your partner or parents) with an insurance professional to learn more. As stated above, some carriers offer simple or express underwriting while some require additional testing, medical records and blood work as part of the review.
Common disqualifying health conditions are:
- Alzheimer’s disease, dementia or taking meds for memory loss
- ALS or Lou Gehrig’s disease
- Aneurysm
- Cancer history over a 10-year window
- Cardiomyopathy
- Chronic kidney failure
- Cirrhosis of the liver
- Congestive heart failure
- Coronary artery disease
- Diabetes with onset prior to age 25
- Dialysis treatment
- Down syndrome
- Higher BMIs
- HIV/AIDs
- Huntington’s Disease
- Implantable defibrillator
- Muscular dystrophy
- Organ transplant recipient
- Oxygen Use
- Undiagnosed Medical conditions, undergoing new treatments
- Untreated Sleep Apnea
There are alternatives for those who cannot qualify for the plans mentioned or do not want to purchase a plan.
- Pay for a contract with a rating
- Buy a Term Life Policy Accelerated Benefit Rider
- Apply for a Home Equity Conversion Mortgage, a reverse mortgage (HECM)
- Consider a Single-Premium Immediate Annuity (SPIA)
Arizona – passed on this round of legislation, California – was the file December 2022, Colorado, Connecticut, Louisiana, Massachusetts, Michigan, Minnesota, New York, North Dakota, Oklahoma, Pennsylvania, South Dakota, Vermont, Virginia, Washington – in effect but has updated extensions/exemptions coming, West Virginia.
- The WA Cares Fund will provide a public long-term care (LTC) insurance benefit to eligible Washington state residents who are vested in the program.
- LTC benefits will be paid in $100 stackable units, with a $36,500 lifetime maximum: adjusted for inflation via what is otherwise known as Cost of Living Adjustment/COLA.
- Eligible beneficiaries can access benefits beginning in January 2025.
- The benefit will be funded by a 0.58% payroll tax.
- There is no cap on the amount of wages that may be taxed. Participation is mandatory for all W-2 employees in Washington; whereas other business entities may opt in. Please note: All mandated rules and guidelines are not completely clear as of now.
Last years, our team among many colleagues and clients witnessed WA State’s rollout of a very clunky effort to force people to save for Extended Care and Long-Term needs. They have rolled out their first round and are revising it as we speak. Currently, 2024 will have other exemptions and we expect more information to come.
The link article reports that employers should prepare to begin deducting premiums from the paychecks of their Washington workers who have not notified the employer that they are exempt, beginning on July 1, 2023. In addition, employers may want to make sure employees understand their responsibilities under WA Cares to notify the employer if they no longer qualify for a conditional exemption within the 90-day deadline.
Please be mindful when determining what you and your family may need for your own Extended Care plan while also being mindful of which states are considering legislation. Please see the heat map below to find the current states up for creating their own guidelines.
If you are in WA and want to know your rights to an exemption), please schedule time to discuss your personal situation. Current states considering their own.
Above, we mentioned that certain products may be eligible for the exemption from the forced state mandated LTC plans. Other carriers have 101g filed Chronic Illness riders on their life products. If you are looking for carriers with true 7702 riders as what was approved in WA State, I’d make sure to ask specifically how they filed when looking over plans.
Please talk with a broker who can shop all contracts and riders to be sure your Extended Care Plan is built for you and the state you live in.
From a regulatory standpoint, we know that certain carriers are lobbying in certain states to include 101g riders in their opt-out guidelines, if they decide to go that route. Our hope is other states include 101g as well. This is why we noted earlier that some policies are not considered LTC plans.*
If you need both life insurance protection and a relatively affordable way to pay for potential long-term care costs, you could consider purchasing a life insurance policy and one of the two types of riders available: a long-term care rider (IRS section 7702B) or a chronic illness rider (IRS section 101g). However, we do not know which states are going to approve either currently as this is a moving target so check to see if your state is pending legislation when you begin your Extended Care Strategy.
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Long-Term Care Insurance Resources
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This information is for general informational purposes only. We are not licensed attorneys or tax advisors. We are providing a high-level set of terms for the topic and a product offerings. The products can change over time, so this is to provide general knowledge for someone considering a Long-Term Care plan. Please also note that different states offer different rules and regulations about Long-Term Care so you will want to work with a team that knows the differences and can shop all products for you.
*Please speak with an advisor who is certified in LTC/Extended Care Planning to assist in recommendations.*
