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  • Writer's pictureJohn Caserta

Protecting your retirement with Long-Term Care Insurance

Preparing for retirement is important. John discussed what some of the benefits of Long-Term Care Insurance on WTNH.

What is long-term care insurance?

  • Long-term care insurance pays for the cost of care received at home or in a facility.

  • According to a recent study by Genworth, the national average cost of a private room in a nursing home is about $97.000 while the average cost of an assisted living facility is about $45,000.

  • Connecticut is the 3rd most expensive state for long-term care behind Alaska (#1) and Massachusetts (#2).

  • Traditionally, they have been stand-alone policies but as the market is changing, it’s becoming more common to see long-term care benefits being offered as part of life insurance policies, where the benefit can be use either as a death benefit, long-term care benefit, or a combination of the two.

What types of services are covered?

  • Depending on the policy and benefit you purchase, LTC insurance can either pay for services received in a facility or provide a pool of dollars that can be used for more comprehensive service in a facility or at home.

What is the Connecticut Partnership Program for Long-Term Care?

  • It’s a program created by the Stater of Connecticut that works in conjunction with private insurance companies to offer policies the will allow you to protect assets equal to the amount of benefit that your policy has paid. And should you need to apply for Medicaid, the protected assets would be disregarded.

  • Partnership policies can be recognized by a special logo on the policy document (see below):

  • Partnership policies also provide a minimum daily benefit and automatic benefit increase to account for inflation.

  • While you have to be a resident of Connecticut to purchase a policy through the Partnership program, it will pay a benefit if anywhere.

What are common misconceptions about long-term care insurance?

  • There is no need for it if you have Medicare.

    • Medicare only covers the first 100 days in a skilled nursing facility after you have spent three days in the hospital. And the coverage is limited to a Medicare-certified facility.

  • It only covers care in a facility.

    • Long-term care insurance can pay for care in a skilled care facility, adult day care, or even at home.

  • Few people will need long-term care.

    • The US Government estimates that about 70% over the age of 65 will need some form of long-term care in their lifetime.

What should one look for in a policy?

  • What services are covered, where they can be received, and by whom.

  • The amount of daily benefit in the policy (a semi-private room in CT costs about $414/day).

  • The total amount of lifetime benefit available.

  • The elimination period or waiting period, which is the amount of time for which you are responsible for paying for care before the policy pays a benefit.

What resources are available to learn about long-term care?

  • Your financial adviser


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