There are reasons people tell you to plan ahead, especially with your finances. You never know when the unexpected could happen and you need to be financially prepared. This goes for your plans after retirement, as well. Many people mistakenly think that their retirement plan will cover all their needs post retirement, but that is unfortunately not the case. With people living much longer than in the past, many outlive their retirement plans. This is a major issue because you may not have the extra cash to pay for your own long-term care. It’s extremely expensive and if you don’t have a hybrid long-term care policy in place, you could find yourself in a financial crisis.
If you go to a nursing home, it can be as expensive as $90,000 for a private room in Illinois. That’s a large sum of money that can run out very quickly. Many people don’t realize how much it can cost, especially if you are there much longer than expected. Alzheimer’s disease has been one reason for much longer stays. It has caused many people to completely deplete their estate.
You can’t predict the future, which is why you want to make sure that you will be taken care of without putting yourself or family in a financial bind. There are so many benefits of having a hybrid long term care insurance policies. You can rest assured knowing you will be taken care of, and that you will still be able to leave something behind to your family.
According to a New York Times article, “Working with financial planners, the Cassells looked at a relatively new option, hybrid long term care insurance policies that package coverage for long-term care with a universal life insurance policy or a fixed annuity. Such products can be tapped for reasons other than long-term care and even passed on to heirs, although the amount available for other uses is reduced if you use the hybrid to pay for long-term care”…“It’s a triple threat,” Dr. Cassell said, “because it could be viewed as a fixed-income investment, cover long-term care and provide a life insurance benefit.” (John F. Wasik, “Hybrid Long-Term Care Policies Provide Cash and Leave Some Behind”)
Many products offer the option to have a rider, which can include accelerated benefits, payments for chronic conditions, money for your beneficiaries etc. This option will cost you more to add to your policy but will offer you many beneficial options, if needed. If care is never needed then your hybrid long term care insurance policy will refund all premium paid with interest in the form of life insurance back to the family tax free.
You definitely want to assess you, your partner, and your families needs before you make any decisions. The first step is knowing your options and becoming informed about hybrid long term care insurance so contact us today for questions and hybrid long term care insurance in Illinois and your company options.
As the number of retirees in this country increases, more people are needing long-term care services. The costs of care in assisted living facilities and nursing homes has skyrocketed in recent years. And it doesn’t help that a lot of people still think that Medicare can pay for LTC. If you or your parent are nearing the age of retirement, it’s important to plan for the likely eventuality of needing long-term care services. This article discusses your options for paying for long-term care in Illinois.
Recent statistics suggest that Illinois is the 31st most expensive state for long-term care insurance in the country, below Ohio at position 30 and above Wyoming at position 32. Across the country, the average cost of paying for a semi-private nursing home room was $222/day (for a private room, the average national cost was $248).
In Chicago, the cost of a semi-private nursing center room can be as low as $99, to as high as $320. Computed annually, that spreads to between $36,135 to $116,800 each year. In 2012, the cost for a semi-private room was $183 in Chicago, $208 in Des Plaines Area, $173 in Peoria, and averaged at $152 across the state. The cost of a private room, on the other hand, was $206 in Chicago, $271 in Des Plaines Area, and $228 in Peoria.
Obviously, the cost of nursing home care is more than most states people in Chicago can afford, especially given that you might end up needing long term care for a number of years on end.
To qualify for Medicare in the State of Illinois, the following requirements are applicable:
Medicare will pay for up to 100 days of ‘skilled care’ each year. According to Medicare, ‘skilled care’ describes:
If you’re thinking about Medicaid as your first line of defense in paying for nursing home care in Illinois, keep in mind that there are strict rules for eligibility in this state. In addition to qualifying financially, you will also need to medically qualify so that Medicaid can pay for care services in a nursing home, home health care, or in an assisted living facility.
Illinois citizens who are 6 years (or older), blind, or disabled may apply for Medical Assistance (Medicaid in Illinois) via the AABD (Aid to the Aged, Blind, and Disabled) program ONLY if they meet asset and income limits. The income limits will vary depending on whether you’re receiving care at a nursing home, assisted living facility, or in the community. Qualified individuals living in the community can be covered for up to 100% of the FPL (Federal Poverty Level). Back in 2014, the FPL figure was $973 per month for a one-person household and $1,311 per month for a two-person household.
People living in a nursing home can receive medical assistance even if their income is above the FPL, but then they’ll be required to contribute nearly all their monthly income to fund the care costs. In fact, AABD recipients who’re staying in nursing facilities are allowed to keep just $30 for themselves. There are no provisions for the community spouse (the spouse who’s not staying at the nursing home) to keep more income.
To qualify for Medical Assistance in the state of Illinois, the sum total of your resources (assets and properties) must not exceed $2,000. With your spouse included, this limit goes up to $3,000. Your home is not counted as a resource when evaluating eligibility for Medicaid in Illinois. Similarly, one car is exempted, and personal belongings (household goods).
If you’re wealthy enough, you might be able to pay for long-term care out-of-pocket should the need arise. But you need to be worth at least $2 million to have this assurance. Keep in mind that costs of long-term care are inflating at an alarming rate each year. It’s also plausible that you should factor in the possibility of your spouse or any other close dependent needing care. If your portfolio is large enough to guarantee this kind of financial confidence, then you can privately pay for nursing home care. Otherwise, you might need to look at long-term care insurance.
Private long-term care insurance is often the way out for people who aren’t wealthy enough to privately pay, and who want to avoid the shortfalls of Medicare and Medicaid. Since long-term care insurance packages vary extensively, it’s important to evaluate and judge individual policies based on their own merits. You can request your preferred insurance company to provide a written description of their LTC policy’s benefits or call an agent for a break-down of the policy. The younger the applicant, the lower the premiums required to pay for long-term care insurance. Different policies also have riders that you’ll want to know about before you seal the deal. Concerned by the soaring costs of long-term care insurance at nursing homes, assisted living centers and home health care, more Americans are purchasing this form of insurance for their aging parents.
With Medicare’s limited benefits and Medicaid’s requirement that you’re virtually broke in order to receive help, a lot of people who can’t pay out-of-pocket are looking to insurance. Long term care insurance policies help eradicate the risk of paying for long term care, which can easily deplete your net worth. For people who are concerned about paying for this kind of insurance and never using it, some newer form of long term care insurance policies referred to as hybrid policies have a provision of converting your premiums into a death benefit for your dependents (if you don’t use long term care).
Long-term care insurance is basically designed to help with individual assistance in old age or in the event that a young person becomes disabled. However, like several other financial products, most people are yet to give this the consideration it perhaps warrants. Before you can buy an LTC policy, ask yourself this;
Well, that is a bit tricky to answer with absolute certainty. However, if you were to make a decision based on current statistics, 7 out of 10 people will require long-term care once they hit 65. That is about 70% of the population. It is therefore highly probable that you will require LTC in your old age. In addition to needing care, a policy will only cover you if the care you require meets certain criteria involving the daily activities of living. If care can be provided by family members, then you probably do not require a long-term care insurance policy.
Whether or not the government will pay for long term care still remains a very confusing topic. Medicare does pay up to a certain amount for limited nursing care. However, for this to work, the individual must have very limited assets ($2,000) in most states and also be on very low income. Before settling on Medicaid though, take into account that its home care programs are in most times underfunded and have many people on their never-ending waiting lists.
Long Term Care policies are usually defined by the period over which they will pay out benefits and at times by how much they will pay out per day. LTC policies also have what is known as an elimination period. This is basically a period (often 90 days) which the insurer will not pay benefits. The costs of long term care keep on rising and have now hit more than $300 per day in some states. Make these considerations before purchasing a policy.
Some LTC policies do not allow clients to carry over extra daily benefits. This means that if you purchase with daily benefits of $300 but end up in long term care that only requires $150 per day, then you lose the extra $150 per day. However, pool-of-money coverage policies give all benefits to the client regardless of what is being used. A $300 per day four-year policy will, in essence, be giving you benefits totaling to $(300*365*4).
The cost of goods and services keeps going up periodically as a result of inflation. Inflation protection increases the premiums you will pay each period throughout the accumulation phase. However, the inflation protection will ensure that you do not end up with a third of the value you had accumulated over the years due to inflation. If you accumulate $100,000 from the age of 45, it will definitely not be worth the same after 40 years when you require long term care. You should absolutely buy inflation protection.
It is a question that lingers on the minds of many, and well, yes you can. However, the bigger question will be, should you? Self-insurance in its most basic form involves setting aside an amount of money to cover for uncertainties in life. Self-insuring individuals do not involve third party insurance company but rather set aside a certain amount per period that amounts to a lump-sum at a certain time in future that can then be used to cater for unknown eventualities. There are several factors a potential self-insuring person should consider before starting. We take a look at a few of these.
Depending on the math you come up with, can you consistently set aside say $100 per month without fail for the period you decide (which is probably long). With insurance companies, individual discipline is enhanced to a large extent by the penalties associated with non-payment of premiums. With self-insurance however, there are no penalties to not making the monthly contribution and the same can therefore be easily foregone. However, each period that you do not make your contribution will mean a reduced amount in the accumulated sum or in your investment pool at the end of the specified period.
The cost of LTC keeps going up each year. Self-insurance implies that should you require long term care, the funds you will have accumulated will be the only means of covering the costs. However, with the annual rises in cost, the funds may not be enough to cater. With an insurance company, however, the cost is irrelevant especially if a period had been agreed upon at the onset of the policy. A good insurance policy with a reputable company will shield you from the risks brought about by inflation.
Nobody knows with certainty for how long they might require long term care. Picture this, you take the self-insurance path and accumulate sufficient funds to last you four whole years of long term care perhaps because you feel four years is the average period one needs long term care. In real life though, you find yourself requiring long term care for more than ten years, will you really have saved up that much through a personal self-insurance scheme? Probably not
It is generally assumed that the elderly people in society are the most likely to require long term care. However, there are several instances where catastrophes occur to people at relatively young ages and requiring them to have long term care. If you got on to a self-insurance scheme and required care at a young age, you will probably not have saved enough to cover all your needs.
However, even with the many disadvantages, self-insurance still has its benefits since it is virtually impossible to get a life insurance policy with a good company covering more than five years of care. For those with the required discipline and a relatively high income however, the advantages of self-insurance in the long term may just well outweigh the drawbacks.
The Illinois Long-Term Care Ombudsman Program (LTCOP) standards and procedures regulate and govern the activities of the Illinois LTCO Office, all LTCOs, provider agencies, Area Agencies on Aging, The Department of Aging and all other parties involved in Long Term Care Ombudsman Program. The policies and procedures are divided into eleven chapters designated chapter 100 through 1100. We look at each chapter in brief and outline what is contained in each. The program is available on the Illinois Department of Aging website
The chapter gives descriptions of the mission, responsibilities, and authority of the state’s LTCOP, the general layout of the entire program document, procedures to make changes or alterations to the document and a comprehensive list and explanation of terms used in the manual.
This chapter describes the responsibilities of the State Department of Aging as well as those of the Illinois Long Term Care Ombudsman Program Office. Other agencies whose responsibilities are described include provider agencies and SLTCOP. The chapter also gives guidelines regarding the processes of certification, decertification, designation and de-designation of provider agencies and Ombudsmen.
Designation authorizes an agency to operate a regional Ombudsman program in a service and planning area or a particular geographic area. Certification, on the other hand, authorizes a qualified individual to act as a representative of the office. Qualifications, in this case, involves meeting the minimum standards, remaining conflict-free and successful completion of training. The chapter describes Designation of Programs, Refusal to designate and de-designation, certification, refusal to certify and de-certification and complaint-handling procedures.
The fourth chapter describes the five components of service delivery provided under the regional programs. The five service delivery components are Investigative services, regular presence, consultation and community education, issue advocacy and resident & family councils development and support. The chapter also outlines the program’s evaluation procedure.
This chapter gives guidelines for the investigation, verification, and resolution of complaints received by long-term care residents. The main points in the chapter include Receipt of complaints, investigation, verification, resolution, abuse, neglect, complaint referral and documentation of investigation.
This chapter gives guidelines to be followed while seeking access to records pertaining residents, facilities and states and what to do in the case such access is denied. The chapter is divided into four sections; Access to residents and facilities, access to residents’ records, access to state and facility records and access to participants and participants’ records.
This chapter outlines the procedures for seeking legal advice from the LTCO Office and other provider agencies. This also includes indemnification and representation from the office of the attorney general and what to do if such endeavors are met with retaliation, reprisal or any means of interference.
This chapter is designed to assure residents, witnesses, complainants and other involved parties that their confidentiality is guaranteed. It also describes the timeframes involved in the storage of records pertaining these individuals.
This chapter describes and defines conflict of interest for individuals involved in the program and the related procedures for disclosure, review, and remedy as well as the penalties involved for failing to identify or remedy a COI.
This chapter defines the roles of program volunteers and their minimum qualifications.
The final chapter describes program participants and the responsibilities of Ombudsmen.
There are several ways to cover your long-term care needs. These include self-insurance, traditional long-term care insurance, hybrid-linked benefit policies and use of annuity contracts. We look at the pros and cons of each in brief and which policy suits what kind of person.
This has till now been the most common and rather popular means of long term care insurance. The insurance concept basically gives you a single stand-alone policy whose benefits you elect at the beginning of the contract. Most of these traditional policies provide a monthly benefit of a certain amount, a specified benefit period, inflation protection and a waiting period. Premiums for these policies are usually paid on monthly, quarterly or semi-annual basis.
Traditional Long Term Care Insurance policies have no cash value unlike with annuities. If the policy owner does not make a claim, then they do not receive any benefits. It basically works like your car insurance. Most of these policies are however customizable to meet specific needs of each client. Traditional policies will also in most cases provide Medicaid benefits if inflation requirements are met by the client. Premiums also happen to be subject to periodic rate increases with most service providers.
Traditional LTC policies do not have cash benefits unless the policy holder makes a claim within the period. However, one could choose to link their future benefits of long term care to a paid life insurance policy or annuity. Most of these hybrid LTC policies start with a one off payment that could range from $50,000 to any amount. Most of these policies also provide the added benefits of electing future benefits at the onset of the policy.
Unlike traditional insurance policies, a client is guaranteed to receive their premiums back in case they never require long term care. A hybrid policy will pay for long term costs should one be required, provide a tax-deferred insurance benefit if the client does not need care and provide a full refund should a client have a change of mind. Hybrid policies are generally favorable for clients with liquid assets that are not required as a means of income in requirement.
An annuity is basically a financial product designed to accept and grow funds from a person and then on annuitization pay an amount or a series of amounts to the person after an agreed upon period of time. The period when the individual pays the funds but does not receive benefits is known as the accumulation phase of the annuity. Annuities were designed to provide income streams to individuals after their retirement and to reduce the very possible risk of scenarios where one outlives their assets. There are various types of annuities; fixed, variable, single and multi-premium, tax-deferred and guaranteed annuities. Choosing between an annuity and life insurance will depend greatly on a person’s specific objectives. Annuities provide a safety net of income streams in retirement while life insurance benefits those left behind once the principal passes away.
Long term care insurance is a fundamental part of many people’s lives. However, there are a few instances when you could actually do without one and end up fine. When would this be?
Self-insurance in its most basic form involves setting aside an amount of money to cover for uncertainties in life. Self-insuring individuals do not involve third party insurance company but rather set aside a certain amount per period that amounts to a lump-sum at a certain time in future that can then be used to cater for unknown eventualities. This will, however, require you to be much disciplined and have a medium to high-income level. If done well, a self-insurance pool could cater for your long term care needs.
An annuity is basically a financial product designed to accept and grow funds from a person and then on annuitization pay an amount or a series of amounts to the person after an agreed upon period of time. The period when the individual pays the funds but does not receive benefits is known as the accumulation phase of the annuity. Annuities were designed to provide income streams to individuals after their retirement and to reduce the very possible risk of scenarios where one outlives their assets.
The long term care rider gives you the added benefit of withdrawing the entire value of your account without incurring withdrawal charges and market adjustments. This way, the total value of the annuity at that time can go towards financing your long term care.
Insurance companies often deny requests to purchase long term care policies from people past a certain age limit. This is due to the increased risk that advances in age pose. An eighty-year-old man will probably need long term care sooner than a healthy twenty-five year old. It is, however, advisable to plan for old age early enough to avoid such denied requests.
A hybrid policy allows one the choice to link their future benefits of long-term care to a paid life insurance policy or annuity. Most of these hybrid LTC policies start with a one-off payment that could range from $50,000 to any amount. Most of these policies also provide the added benefits of electing future benefits at the onset of the policy.
Unlike traditional insurance policies, a client is guaranteed to receive their premiums back in case they never require long term care. A hybrid policy will pay for long term costs should one be required, provide a tax-deferred insurance benefit if the client does not need care and provide a full refund should a client have a change of mind. Hybrid policies are generally favorable for clients with liquid assets that are not required as a means of income in requirement and are in various ways better than the traditional LTC policies.