While many have Long Term Care (LTC) insurance, the rising costs of Nursing and Custodial care has caused LTC policies to gradually increase in premiums. One of the most difficult conversations to have is when a client has had their LTC policies for 10+ years and has consistently seen their premiums increase. They are concerned that they will no longer be able to afford to keep the policy yet it seems outrageous for them to have to forfeit the policy after paying into it for so long. This dilemma has turned our attention on what is considered to be a much more conservative alternative, Short Term Care.
Most Long Term care policies have an elimination period of 90 days before the policy will start to pay benefits. The reason for this 90 day waiting period is not only to keep the premiums down but also because Medicare covers up to 100 days of Skilled Nursing Care. Over the years however, Medicare has made it more and more difficult to qualify for these 100 days and if Medicare considers the care ‘custodial’ (meaning you’re not expected to get better) they will not pay 1 day or 1 penny of the care. Because of the increasing difficulty of qualification by Medicare standards, many people have had to pay of out pocket for the first 90 days which can cost in excess of $20,000.
When a need presents itself, so does an opportunity. Short Term care was designed to “fill the gap” between your health coverage and Long Term Care policy. Short Term Care has now grown and developed into a fully functional Long Term Care alternative. Not only can these be used to fill the gaps of LTC but they can also be designed with a large enough daily benefit and multiplier that they can provide a Nursing Care or Home Health Care benefit of well over $100,000 AND premiums tend to be a lot more stable.
Another major difficulty with LTC is its underwriting. It can be incredibly difficult to qualify for LTC because of the amount of money the policy needs to pay in the event of a claim. When going thru underwriting for LTC, the client will need to get a blood & urine test, full MIB and prescription check and even cognitive test. They are incredibly difficult to get approved. Short Term Care however is what we call “Easy Issue” meaning no blood or tests of any kind, just a list of questions.
For more information on Short Term Care, please contact us.