Everybody gets older, but nobody enjoys thinking about what happens when you can’t care for yourself anymore. We all grow up with the aspiration of being an independent adult, but on the other side of the spectrum, long term care is a necessary step for many Americans. Long term care insurance is one way to provide yourself with the assistance you need, protect your life savings, and enjoy self-reliance with peace of mind. Many people underestimate the importance of long term care insurance by hiding behind one of many common myths:

Myth #1. I know that my family will be there for me.  

Having loved ones willing to help is a great blessing, but relying on them might be unrealistic. What happens when your spouse is unable to care for you, or perhaps your children move to another area? Depending on your family might seem reasonable, but it can create unnecessary stress both financially and emotionally that can be remedied with the implementation of a long-term care insurance plan.

Myth #2. I’m still young, I don’t need it yet.

While most of us assume that long-term care insurance is only for seniors, it is actually available for adults of all ages. An accident or illness can strike at any age. Forty percent of those using long-term care insurance benefits are adults between the ages of 18 and 64. This type of insurance can protect your family and your assets if anything should happen to you which would require in-home and nursing care.

Myth #3. I will use my personal savings to pay for my care:

Paying from personal savings is a viable option, but keep in mind the rising cost of health care. Here are the current national averages for long term care services:

$20/hour for a home health aide ($28,800 per year)

$3,270/month for care in an assisted living facility

$6,210/month for a semiprivate room in a nursing home

$$7,050/day for a private room in a nursing home

According to the U.S. Department of Health and Human Services, the average length of stay in a nursing home is 2.4 years, costing an average of approximately $181,000 individual.

Myth #4: I’ll have Medicare to take care of it.

The fact is neither Medicare nor Medicaid covers long term care expenses. Health Insurance will not cover the expenses either since long term care is not considered medical care.

Myth #5: I don’t like nursing homes, I won’t use one.

Long term care insurance does not equal nursing home. Most long-term care services are given in the home. In fact, having a policy will actually help keep you out of a nursing home by providing options for you.

Myth #6: I don’t think I’ll ever need it.

This is probably the most common myth. A poll by The Gallup Organization shows that 76 percent of Americans believe they will never have the need for long term care. However, two out of five Americans end up needing long term care at some point in their lives. AHCA projects that the number of elderly living in nursing homes will increase 58 percent by 2020.

Failure to prepare for the cost of long-term care is the primary cause of impoverishment among the elderly, this leads to a decline in their healthcare and a drastic drop in quality of life. The average American man can expect to spend $56,895 on long term care; the average woman will spend almost double that at close to $124,370. From the moment a diagnosis or accident occurs, personal resources can be depleted in a matter of weeks.

Long term care insurance is a small price to pay for the peace of mind it brings knowing you’ll be taken care of in the long term.

Save 15 percent in 15 minutes, supermarket savings, choosing good hands, insurance discounts are constantly being advertised to consumers across the country. How do you know you’re getting the best price?

Saving on car insurance is one of the best ways to tighten your budget when times get tough, and it’s not as hard as you might think. The truth is, many insurers have similar discount programs and most will include safe-driver discounts, vehicle safety discounts, and multiple driver/car discounts. However, with a little more research and initiative, you can take advantage of other available discounts that might not be so widely publicized.

1. Good Student discounts. Frame that report card because it could be worth big bucks. An average B student can save their parents up to 20% on their insurance premium.

2. Mature Driver discounts. Embrace aging, your insurance goes down! With a clean driving record, drivers over 55 or may qualify for additional discounts.

3. Long Term Customer Discount: Some companies will offer discounts to their most loyal customers. If you stick with the same company, as what rewards they offer.

4. Lifestyle discounts. Some companies may offer lifestyle discounts for drivers who stay 100% alcohol and tobacco free.

5. Safety discounts. In addition to the safe driver discounts, many insurance companies will offer discounts for cars that have extended airbags, anti-theft devices, backup assist and other safety equipment.

6. New Car: You may assume that a new car will increase your insurance rates, but that’s not always the case. Some companies provide discounts to families who buy brand new cars right off the lot. Perhaps they’re assuming you’ll be more careful with a shiny new ride.

7. Defensive Driving Course discounts. If you’re looking to save some cash, ask about discounts offered for completing a defensive driving class. In some areas, one class can give you many years of a reduced price.

8. Vehicle discounts. You may get a discount simply because of the car you drive, some companies offer discounts for economy cars, or discounts for hybrids and other fuel-efficient vehicles. If you drive a truck or participate in farm work, there are additional discounts available.

9. Low-Mileage discounts. If you work from home, you might want to talk to you insurer about a low-mileage discount. The average driver travels 12,000 miles per year, if you drive significantly less than that; you may be eligible for discounts.

10. Professional Organization discounts. Are you an alumnus, member of the bar, a teacher, or clergy? Many organizations offer professional discounts exclusive to members.

Oftentimes, taking advantage of deep discounts is as easy as asking. Be sure you to ask your insurance agent to confirm that you are taking advantage of any discounts available. It also might be worth it to ask about upcoming promotions, reward programs or other offers that might not be marketed to the general public.

When choosing car insurance, asking the right questions can save you time, anxiety, and most importantly, cash. Many insurance agents will not go through every aspect of your policy because they assume you’ll read it when you get home. However, the likelihood of you finding time on your own to read through the fine print is next to impossible. Even if you find the time to read through your policy word for word, it’s not always easy to understand. Asking your agent the right questions is crucial to getting the coverage you need and the benefits you want at the very best price.

1. Do I have both comprehensive and collision coverage?

This is an important question to ask because comprehensive and collision coverage are separate and you may have one, the other, or both. Collision covers vehicle repairs when an accident occurs, regardless of fault. Comprehensive coverage pays for damage caused by anything that is not a collision, (i.e.: theft, vandalism or weather damage). Although each option has its own deductible, it is generally best to have both policies, especially if you own newer cars that you can’t afford to replace. However, if your car is older, it might not be worth it to carry both. For example, it may not be worthwhile to pay $400 a year for collision and comprehensive insurance to protect a car that is valued at only $3,000.

2. Is my policy customizable?

Some policies come as a package, meaning you get what is included regardless of what you actually need. Other policies may be customizable to your specific needs, which can save you money and provide the best coverage. If your agent is able to provide a policy that is tailored to your individual requirements, they can be sure you’re getting exactly what you need at a price you can afford.

3. How much will my policy pay if my car is totaled?

The definition of a total loss to a car is when the cost to repair the damage is the same, or more than the vehicle value. There are two options when it comes to determining how much your policy pays if your car is totaled. The first option is an actual cash value option which means the insurer will determine the vehicle value before the accident. The second option is a pre-determined value agreed upon when you sign your policy. This second option is generally more expensive and is reviewed each time you renew your policy. The actual cash value policy is more common and insurers will generally use the Dealers Association (NADA) or Kelley Blue Book to determine your vehicle’s value.

4. Do I have Uninsured/Underinsured coverage?

Uninsured or underinsured motorist coverage generally does not come standard on all policies because it is not required by all states. If your state does not require it, this is something you’ll want to add to your current policy. Especially in states where it is not required, many drivers do not have adequate insurance to cover you if you get into an accident at their fault. Uninsured or underinsured coverage (UM/UIM) can be purchase for bodily injury or property damage. UM/UIM insurance is not a replacement for collision coverage, but it is cheaper, if you can’t afford full coverage. It only pays out a minimal amount for repairs, but generally requires no deductible. If you carry collision insurance as well, you can use your UM/UIM policy to contribute to your deductible if needed.

Always ask for clarification from your insurer on specific clauses or paragraphs you are unsure of to be sure you understand exactly what is covered. Asking the right questions can give you peace of mind knowing that you have the right coverage for you and your family.

Understanding insurance can be a bit of a minefield, but finding the right agent can help you safely navigate through the complicated world of insurance and ensure that you get the best deal. The key decision comes down to choosing the best insurance agent who can provide you with the services you need. There are primarily two types of insurance agents: captive and independent. Both have the same goal of providing you with quality insurance coverage, but it is important to be aware of their notable differences.

Independent Agents

Independent agents are not tied to any individual insurance company and work directly for the customer. So, this means that they have the ability to sell you insurance from multiple companies depending on your needs. For example, ABCInsurance might sell insurance for 123Auto, XYZAuto, and A1Homeowners. This gives you, as the buyer, more options in finding a policy that fits you because you can look at three or four different companies through one agent. Because they sell policies from multiple companies, Independent agents have the ability to compare prices and services among different insurers to find the best product for their customers.

Captive Agents

A captive agent is held “captive” by one specific insurance company. They are not necessarily employed by that company, but they have entered into a contract with that insurance company and can only offer products and services from that company. For example, ABCInsurance is an insurance agency who can only sells policies for 123Auto so their sole purpose is to solicit business for 123Auto. Because they can only sell policies from one company, Captive agents are limited in what they can sell.

There are pros and cons to both of these options. While an independent agent might be able to offer you a wide range of options and can compare quotes from their various carriers to get you the best deal, but you might not be familiar with the companies they represent. A captive agent can only offer you plans from one company, but he will be an expert on what that company has to offer and will have a close relationship with that carrier. Both agents, regardless of their status will be licensed by the state to sell insurance and will do their best to find the coverage and price that make you, the customer, feel the most comfortable.

The most important aspect in choosing an insurance agent is to find a well-rounded professional who you feel comfortable working with on a long-term basis. They should be knowledgeable, understanding and respectful of your needs as well as provide you with affordable insurance options.

Medicare Part A: Check.

Medicare Part B: Check.

What about the rest?

While Parts A and B of Medicare cover close to 80% of medical bills and expenses, they do not cover them all. But even 20% can add up to a substantial out-of-pocket responsibility. When you consider the deductibles, co-pays and various uncovered expenses, the gap in coverage grows wider and the costs may prove to be unmanageable for some. Because of this gap in coverage there are Medicare Supplemental Insurance plans, also known as a Medigap policy, designed to cover the gaps that Medicare parts A and B do not.

To understand the important of Medicare Supplemental Insurance, it’s important to know what Medicare coverage includes.

Medicare Part A - Gives a little extra coverage from standard Medicare including hospital stays, (not including a private room), nursing home care, home health care (if ordered by a doctor), home health care and hospice.

Medicare Part B - Covers the medical basics in addition to doctor visits, some preventive services and outpatient care.

There are now over a dozen Medicare supplemental plans that provide additional coverage to Medicare. The biggest difference in these plans is the monthly premium and the amount of out-of-pocket expenses required.

The Basic Medical Coverage in the most common Medigap plans provide a coinsurance to Medicare in addition to coverage for one additional year after Medicare benefits terminate. This means that any of these Medigap policies will pay for the deductibles and copayments that Medicare leaves behind, eliminating the need for any out-of-pocket payments. In addition, certain Medigap plans can be purchased which may cover at-home help for recovery, physical assistance, in-home visits or preventative care.

Those enrolled in a Medicare Health Maintenance Organization (HMO) or other Medicare Advantage Plans do not need a Medicare Supplemental Insurance policy. But for those relying on Medicare alone, a Medigap policy provides peace of mind to know they are covered, regardless of what the future holds.

When the headlines read of natural disasters sweeping the country or devastating fires destroying homes, it is common to question the amount of homeowners insurance we need to cover our home and possessions in the event a catastrophic event in our lives.

The amount of homeowners insurance you will need to purchase will cover the cost of the following:

1. The structure of your home

2. Your personal possessions

3. The cost of additional living expenses if you are required to live somewhere else while repairs are performed to your home.

4. Your liability to others for accidents that may happen at your home

In order to be sure you have adequate coverage, you will need to determine the value of each of these areas.

Home Structure

Keep in mind that this does not include the land that your home is on. This is because in most instances (perhaps other than earthquakes, which requires different coverage); the land will remain in place. Your home structure is the cost required to rebuild your home at the current construction costs.  This means that the home structure value is not contingent upon the price you paid for your home, or what the market value is, but rather the actual cost of construction. You can talk to your local insurance agent to find building costs in your area.

Possessions

This is where a personal inventory can be very beneficial. Without a personal inventory, many policies will determine personal possessions to be 50-70% of the home value, which can be very low if you own expensive electronics, furniture and other possessions. Conduct a simple home inventory with a video camera or take photos to detail everything you own. Determine the estimated cost of replacing all of these items by recording their make/model and serial number if possible.

Living Expenses

This area of your policy is usually set by the particular policy contract you hold, but you want to check with your agent to be sure you feel that this area is adequate for local hotel or rent prices.

Liability

This is where your umbrella policy kicks in. To determine your needed liability coverage, you’ll need to consider the following formula:  Take your salary, the equity in your home, your investment and the value of any additional assets. Then, subtract your debt.  If the total tops $300,000, you should have an umbrella liability policy which will cover you if someone is harmed in your home and you are held liable. Generally speaking, umbrella policies of $1 million are common, and can be added to your policy with a small annual fee.

It is best to review your homeowner’s insurance policy with your local insurance agent once a year, or when your family circumstances change for any reason.

The struggle of balancing monetary limitations versus what benefits they need can be a balancing act for most individuals. In a utopian society, all individuals would have exactly the coverage they need at exactly the right price, but in reality this can be a challenging task.

The best way to navigate the paths of long term care insurance is to work with a professional who can guide you through the process. One of the key elements when determining long term care insurance planning is to decide where you intend to receive care. Do you prefer to stay where you live now or will you prefer to move to another state to be closer to family? The cost of long term care can vary quite dramatically depending on what state you are in. Today, the most expensive state for long term care is Alaska at more than $220,000 per year for the average nursing home care. The least expensive state is Texas at just over $46,000 per year.

How Much Coverage Do I Need?

1. When you are trying to determine what maximum benefit is sufficient for your situation, you should begin by finding what the average long term care costs are in your state.
2. You want to try and estimate how long you will need care; this is best done by considering your medical history and family history.
3. Consider your elimination period. This is the period of time you must wait to receive benefits; the shorter the elimination period, the more expensive the policy.
4. Consider the inflation options. It is important to keep in mind that you will most likely not be using this policy for a number of years, so it is important that your policy will keep up with the rising cost of healthcare.

When designing a long term care insurance policy, keep in mind that long term care insurance is like most other insurance plans, the higher benefit you choose, the greater the cost. Like most things, the more you buy, the more you pay. You want to find the balance between over-insuring and wasting money and the cost of underinsuring. Understanding the fact patterns, equations and scenarios surrounding long term care insurance premiums will require the help of a professional. But keep in mind that, in most cases, it is more important to have some level of coverage as opposed to none at all.

Types of Long Term Care Insurance Policies

There are three major types of long term care insurance policies to consider once you determine your long term care needs:

1. Reimbursement. This policy is the most common policy. It is designed to repay the insured for long term care expenses incurred up to the maximum benefits in the policy. Under this plan, you receive reimbursement only after expenses are incurred.
2. Indemnity. This policy provides the maximum benefits specified in the policy every day care is received, regardless of what long term care costs are incurred.
3. Cash Benefit. A cash benefit long term care insurance policy will provide you with maximum benefits specified in the policy regardless of whether care was received.

In addition to the major policies, there are additional benefits, restrictions and guidelines associated with each plan. It is best to consult a professional when designing a long term care insurance plan that is suitable for you and your family.

Everybody gets older, but you want to be prepared to keep your independence, make your own healthcare choices and not spend your life savings on a nursing home. Long term care insurance is one way to protect your life savings, lift the burden from your children and provide yourself with self-reliance and peace of mind.

1. I want to stay at home.

For most aging parents and grandparents, staying in your home is a priority. Whether you need help with getting out around town, personal services or medical needs, having long term care insurance will help you get the assistance you need while staying in the comfort of your own home.

2. I don’t want to rely on my children or grandchildren.

Having loved ones who are willing to help is a great blessing, but you may prefer not to rely on your children or grandchildren to care for you. When your spouse is unable to care for you and your children are unavailable, unwilling or you would prefer a professional, long term care insurance can help make sure you receive the care you’ll need without putting physical, emotional and financial stress on your family.

3. I don’t want to spend my last dollar on a nursing home.

Long term insurance will protect your assets and savings from being liquidated in your final years. This allows you to have your life savings to give to your grandchildren, spend how you want, or provide for the luxuries of life. There is no reason for individuals to be required to sell their home, spend their life savings, or liquidate other assets in order to pay for a nursing home

4. It’s cheaper than you think.

Many people may assume that long term care insurance is expensive. The truth is, is it much more affordable than most people think and much cheaper than the actual cost of home health care.

5. It is not covered by other insurance plans.

A common misconception is that health insurance, Medicare or Medicaid will pay for long term care expenses. The fact is, none of these cover long term care expenses. Long term care is generally not considered medical care, so health insurance plans will not cover the expense. Medicare will generally cover skilled care for less than 100 days if you have been in the hospital for at least 3 days and does not cover home or personal care. Medicaid only covers long term care costs for those who meet the states poverty guidelines.

The core components of any long term care insurance policy include: daily benefit amount, benefit period, elimination period, and inflation protection. These four components are what will determine your rates and any increase or reduction in premium.

Compare the Cost of Long Term Care Across the Nation

Component #1: Daily Benefit Amount.

This is the maximum amount your insurance company will pay per day for your care once you become eligible to receive benefits. This amount is available to you whether you receive care at home or in a nursing home.

Component #2: Benefit Period.

This component determines the length of time your insurance company will provide benefits. The combination of the daily benefit and the benefit period make up the “benefit pool.” The benefit pool can be calculated by multiplying the daily benefit by the benefit period. (i.e. a $200 daily benefit with a 3-year (1,095 days) benefit period would have a benefit pool of $219,000.) It is typically wise to purchase a policy with a minimum of a three year benefit period.

Component #3: Elimination period (or waiting period).

The elimination period is the amount of time an individual will be required to wait prior to receiving benefits from their policy. The elimination period may be 30, 60, 90, 180, or even 365 days. The elimination period is much like a deductible. It is the amount of time that you will be responsible for paying your own expenses, before your policy kicks in.

Component #4: Inflation protection.

This is quite possibly the most important part of long term planning. Inflation protection allows the policy to keep up with increases in the cost of long term care. For example, if the cost of care today is $200 per day, the cost of care in 30 years will be closer than $850 per day.

Additional Features and Benefits: Each insurance policy is unique and some carriers offer additional options such as:

Zero Day Home Health Care Elimination Period. This option may waives the elimination period for home health care if the individual has been certified by a license professional as being eligible.

Survivorship Benefit or Waiver of Premium: If you and your spouse purchase coverage at the same time, from the same company, with the same benefits, this policy will waive the premiums if one insured passes away or if one spouse/partner begins to receive care.

With every birthday cake and blown out candle, every person gets another year older. The aging population of America is now depending on their children and grandchildren to provide the cost of long term care in nursing homes or retirement communities across the country.

• Approximately 70 percent of Americans over age 65 will require some type of long term care during their lifetime.
• The average cost of nursing home care in the United States is $70,445 per year. In just three years, the cost can top over $200,000.
• The average nursing home stay is 2.6 years for females and 2.3 years for males, but approximately 20 percent of individuals will be in a nursing homes for five years, that’s over $350,000.

How much does long term care cost in Kentucky?

What is Long Term Care Insurance?

The costs and burdens associated with aging can be overwhelming and expensive, causing additional stress on the family and the recipient. Many individuals may not have children or grandchildren to provide care, or they don’t want to be a burden to their family. Long term care insurance is used to provide some relief to individuals for future long term care expenses. This option allows individuals to continue to manage their healthcare, maintain their independence and avoid relying on family members for long-term care. Long term care insurance typically covers some or all of the costs of home care, assisted living, nursing home or hospice care.

Long term care insurance (LTC or LTCI) provides coverage to more than simply the elderly. Individuals of all ages can require long term care; as a result of a serious accident, an illness, disease, or a cognitive impairment. Generally, in order to receive benefits from a long term care insurance policy you must be certified by a licensed health care professional as being unable to complete two of six defined Activities of Daily Living (ADLs) or suffer from a cognitive impairment which prevents you from being able to care for yourself. Long term care insurance is provided in two main areas: custodial care and skilled care.

Custodial Care

Custodial care is the care required to assist individuals who can still complete many of the daily tasks of living including: bathing, clothing, eating, and toileting. Long term care insurance can also provide assistance to individuals who suffer from a cognitive deficiency that may damage their brain function, but not their daily activity. These impairments range from Alzheimer’s disease to dementia.

Skilled Care

Skilled care covers nursing home care which requires additional skilled services such as physical therapy, occupational, speech, and respiratory therapy or other services required to be performed by a licensed professional. An additional benefit of some long term care insurance policies is the coverage of costs associated with training an individual to provide proper care. This would allow family members to be trained as caregivers at little to no cost to them. This can be a great opportunity for family members who prefer to provide care on a part time basis.

Long term care insurance benefits both the individual and their family. It allows for the individual to be more comfortable in their aging years, maintain some sense of independence and provide for their own care while lifting the burden off of family members and friends. A long term insurance policy is a beneficial alternative to paying for long term care expenses from personal and family savings.

As an independent agency, Braden Insurance can offer long term care insurance plans from multiple companies including Genworth Financial, MedAmerica Insurance, and John Hancock.