2007-08-17 / Columnists

Spotlight On Elderlaw

Long-Term Care Insurance
Commentary By Nancy J. Brady, RN, Esq. And Linda Faith Marshak, Esq.

In past articles we have described the Medical Assistance Program, or Medicaid, as a means for financing long-term care for the elderly or disabled. Through the Medicaid program, benefits are available for long-term care either at home or in a nursing facility, provided certain criteria are met. Due to changes in the law, Medicaid benefits are becoming more difficult to obtain, and we expect benefits to be less and less available especially as the "baby boomer" generation ages. With increases in life expectancy, it is likely that as we age, at some point in our later years, many of us will need some type of assistance either at home or in a facility. These are some of the reasons many individuals should consider purchasing insurance to finance for their long-term care.

In New York State, the sale of these policies is regulated by the New York State Insurance Department. There are minimum standards which have been established, to include four policy classifications- long-term care insurance; nursing home and home care insurance; nursing home insurance only; and home care insurance only. The broadest coverage is available from the long-term care insurance policy, which must provide at least 24 consecutive months of coverage. In New York, policies are not permitted to require prior hospitalization as a prerequisite to receiving benefits. In addition to these requirements, in New York, there is a minimum daily benefit for all policies sold.

Policies are available to individuals over the age of 40 and under the age of 89-years-of-age. This age requirement must be met at the time of purchase, not at the time benefits are used. Some companies have even stricter age requirements, so the consumer must review the policy for age requirements. There are different benefit and elimination period options to choose from as well. In addition to the benefit term, and other options, these choices can affect the price of the policy. Before purchasing a policy, you should review your assets and income with the agent, and if possible, with an attorney, to select the policy that is right for your individual circumstances. The policy should be tailored to your age, the value of assets and income you need to protect, as well as your family situation.

When shopping for a policy, the smart consumer should ask for quotes from several companies, and keep the following points in mind:

Take your time, and review and compare the outlines of policies from a few companies;

Make sure you understand what you are reading, and if you don't, ask the agent to explain it to you until you do;

Do not be misled by any particular agent or advertising;

Do not buy more insurance (or riders to the policy) than you need;

Your medical history is important; don't believe the agent who says it isn't;

NEVER pay for the policy in cash;

Buy the policy from a reputable company; and

Ask the agent about tax deductions available for the policy premiums.

There are also policies available under a plan called the New York Partnership for Long-Term Care. These policies are generally less expensive, and might be a good alternative for some individuals.

Remember, long-term care insurance will protect your assets for your beneficiaries. The time to buy longterm care insurance is well before you need it- while you are healthy and still insurable. Finally, baby boomers should all be looking at long-term care insurance, since the Medical Assistance Program will not be available for as many individuals in the future as in the past.

Brady & Marshak, LLP, Attorneys at Law, can be reached at 718-945-7777.

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