- Who sells LTC insurance?
- Should I buy an LTC insurance policy?
- What is the best LTC insurance policy for me?
- What is the best LTC insurance company?
- If I move to another state after buying an LTC policy, will I still be covered?
- What is a Partnership policy?
- If I buy an LTC policy before my next birthday, will my premium be lower?
- What is the right age to buy LTC insurance?
- Do I really need inflation protection?
- Will I be able to stay out of a nursing home if I buy an LTC insurance policy?
- Should I cancel my LTC policy if I can’t afford to pay the premium?
- Why did my LTC premium go up by 40% but my friend’s premium only went up 15%?
- If my husband is showing signs of dementia, can I still get an LTC policy for him?
- Can I add benefits to the LTC policy I bought 20 years ago?
- Can my insurance company sell my LTC policy to another company?
You can purchase long-term care (LTC) insurance from a large number of companies through insurance agents, or a variety of groups or employers. Some private employers sponsor LTC insurance, and public employers such as the California Public Employees’ Retirement System (CALPERS) and the Federal Employees Long Term Care Program (FLTCP) sponsor their own LTC programs. Some associations, such as the AARP, and fraternal and faith-based organizations also sponsor LTC insurance programs. Employers and other groups rarely pay any part of the premium. They simply make the insurance available to their employees or members, and sometimes to other family members as well. Health screening is still required, although active employees may be exempt from this requirement or subject to minimal screening for employer-sponsored coverage.
The answer depends on your individual needs and circumstances. Buying LTC insurance is part of a planning process for life and retirement. You need enough income to pay the premiums for the rest of your life regardless of premium increases or life changes, such as the death of your spouse. You need to consider how long the benefits should last in relation to the premium you will pay. Most people with modest resources may be better able to pay for a policy with 1, 2 or 4 years of coverage rather than one with benefits that last as long as they need care. Also, if you have few assets, it may not make sense for you to buy LTC insurance. Other options for paying for LTC include investments, savings, home equity conversion (reverse mortgage) and Medi-Cal. For more information, see our Paying for Care section.
What is best for one person may not be good for another. The benefits and amount of coverage an individual or couple needs depends on their unique circumstances. A single or widowed woman may need very different benefits than a married man, particularly if their economic circumstances are different. Women are more likely to live longer than men and more likely to live alone at the end of their lives. Without family members willing to provide some home care and support services, women are more likely to receive LTC in a nursing home or assisted living facility.
Companies that sell LTC insurance in California vary widely. Some have decades of experience, while others are relatively new to the market. Some are large companies with many other products and subsidiaries; others are smaller and specialize in LTC insurance. Some that have sold LTC insurance in the past have recently stopped selling these policies, leaving fewer companies from which to choose.
Rating services such as AM Best and Standard and Poor provide information to help you evaluate the financial strength of companies that sell LTC insurance. The California Department of Insurance (CDI) publishes data showing which companies have raised their LTC insurance premiums during the last 10 years, the amount of the increase and which states were affected. The CDI also publishes comparative information about products available in California and a complaint ratio for all insurance companies. Contact the CDI online or at 1-800-927-4357.
If you buy LTC coverage through a group or nationwide organization, you will need to ask if the policy is approved in California or another state. It may not meet the same high standards or include all the consumer protections that are required by our state law. Health Insurance Counseling & Advocacy Program (HICAP) counselors can help you compare your coverage with California’s requirements. Contact HICAP online or at 1-800-434-0222. You can also contact the CDI online or at 1-800-927-4357 for more information.
While HICAP cannot endorse or recommend a particular product, company or agent, specially trained HICAP counselors can help you sort through some of the issues of buying LTC insurance. They can also help you understand the various parts of LTC insurance policies.
Yes. California has the strongest LTC insurance standards and consumer protections of any state in the nation. However, your policy’s definitions of the places and people that provide LTC services may not match those in other states. For example, the assisted living facility definition in your policy is unique to California, and may not accurately describe assisted living facilities in other states. Another more general definition intended to describe care in facilities outside California may limit the places where you can receive care covered by your policy if you move away. If you move, you should contact the company that issued your policy to understand what services and facilities will be covered in your new home state.
The California Partnership for Long-Term Care is a program of the California Department of Health Care Services (DHCS). It is an innovative partnership between consumers, the State of California and certain participating insurance companies. Partnership policies meet all the requirements of state law as well as additional program requirements.
Partnership policies have a unique state-guaranteed asset protection feature that allows you to retain a certain amount of your assets if you need to apply for Medi-Cal later in life. For more information, see The Partnership section.
Not necessarily. Although companies base their premiums on age (the older you are, the more you will pay), the difference in premium from one year to the next may not be significant. If the only reason you are buying a particular policy is to lock in a lower premium, you may not know enough about the policy. If you are feeling pressure from an agent to make a decision before you fully understand the product just to save a few dollars, you should find another agent. Professional LTC insurance agents understand that this type of policy is one you will have for the rest of your life, and it’s important that you understand how it works and be comfortable with the decision you make. It’s always a good idea to bring along a friend, relative or other advisor when you meet with an insurance agent to discuss buying an LTC policy.
This is an individual decision, based on many factors. Most people think about LTC insurance when they are close to retiring. Others buy it through an employer much earlier. Premiums are much lower for people in their 40s and 50s than for those over age 65. In addition, as people age, they are more likely to develop health conditions that may make them uninsurable. After age 60, premiums for LTC insurance begin to rise steeply. On the other hand, LTC services and places where people receive care are changing, and may not be the same services or places described in an LTC policy purchased 40 years earlier.
In general, yes. Inflation protection should be included in every LTC insurance policy because these policies pay a fixed dollar amount for each day of care. Most people are buying these policies decades before they will need care. A fixed daily benefit loses buying power each year. In 14 years, it will only pay for half the care it pays for today, while the cost of care continues to inflate each year. The difference between the LTC insurance benefit and the cost of care will come out of your own pocket. Inflation protection will help your benefits keep up with inflation. As the number of people needing care grows, the competition for caregivers and care facilities will fuel cost increases.
Not necessarily. Having an LTC insurance policy may not keep you out of a nursing home if that is the only place that can provide the appropriate care. Around-the-clock care at home is generally more expensive than nursing home care and may require more than one caregiver. If you have a comprehensive LTC insurance policy, it should provide you with protection in any setting, including care at home, in assisted living facilities and in nursing homes. While most people prefer to receive care at home, they may have no choice if their condition requires care in a facility.
Consider another option first. In California, you can request a reduction in your policy’s benefits so you can afford the premiums. You can reduce the daily benefit amount, the number of years the policy will pay or make other changes that will reduce the premium to an amount you can afford. You don’t need to wait for a premium increase to exercise this right — you can make this request at any time. If you have paid for LTC insurance for years, you probably won’t want to cancel your policy and waste those payments. Instead, you can reduce your benefits and keep some of the coverage you have paid for over the years.
Premium increases are based in part on the benefits purchased. Someone who has a comprehensive policy that will pay benefits for 5 years will usually have a greater premium increase than someone with a policy that pays benefits for just 1 year. Premium increases may also depend on your age when you bought the policy, and on the year you bought it.
13. If my husband is showing signs of dementia, can I still get an LTC policy for him?
It’s unlikely that an insurance company would issue an LTC policy to someone who already shows signs of cognitive deterioration. With other health conditions, it depends on the company’s requirements. Some companies use strict health screening (also known as medical underwriting), while others will sell policies to people who have certain acceptable health conditions, but may charge them a higher premium. For more information, see our Health Screening section.
If you are still insurable and can afford to pay an additional premium, you may be able to add benefits to your LTC policy. You could keep the policy you have and purchase a rider that adds benefits to your existing policy, or buy a second policy from the same company or a different company. You could also buy a new policy from your current company, which might offer you a premium credit if you pass its health screening. Your insurance agent can help you add benefits to your existing policy or replace it. If you decide to replace the policy, your agent must give you a written comparison of the two policies and identify how the replacement will benefit you.
If you are not still insurable, your policy will still pay for the benefits you bought, but will not provide the newer benefits you want. You will need to weigh the continuing cost of your older policy against the benefits it provides to determine if you should keep it. In general, older policies are often less expensive than newer policies. So it may be worthwhile to keep your old policy for the benefits you originally purchased. If you decide not to keep it, the company will retain the premiums you paid without incurring any future risk of a claim.
Yes, insurance companies can sell their entire LTC business or a select group of policies to other companies. In addition, it is not unusual for insurance companies to buy other companies. If this happens, your policy and benefits will not change. Your premium, however, might increase if the new company uses different pricing assumptions than your previous company.
For general LTC information, see: