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Duane Lipham
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Duane Lipham is a Certified Long-Term Care (CLTC) consultant who writes extensively on long-term...read more

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Financing Long-Term Care

Comments For "Are Tax-Qualified LTCI Policies Consumer Friendly?"
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6 Responses to “Are Tax-Qualified LTCI Policies Consumer Friendly?”
  1. rosalen Says:

    duane, i have been reading your blog for the past few months and i have known i needed long-term care insurance, but just found the entire process so intimidating. i just wanted to thank you for explaining things in real words that everyone can understand.

  2. Duane Lipham Says:

    Thank you for the kind words. LTCI can appear to be very confusing because of the multitude of options and the fact that the policy design is so different from other forms of insurance.

    But as you can see, I am a fan of keeping things simple and focusing on the five foundational benefit choices that can have the most direct impact on your care. Once you have done that, 90% of your work is done in my opinion.

  3. JosieM Says:

    My mom has Alzheimer's and we are now paying a fortune for her care at a great facility - definitely worth the money, but still hard on the family. I just started looking into long term care insurance because I'd hate for my children to have to deal with what we are dealing with financially. I'll definitely be looking out for the policies that have provisions for this. glad to hear things are changing.

  4. Duane Lipham Says:

    Hi, JosieM, if Alzheimer's is in your family's medical history I recommend that you consider a benefit period that is as long as you can afford. Three year benefit periods work well for most LTC situations, but Alzheimer's can stretch on for awhile longer. So having a five year or even longer benefit period would be a wise choice as long as it is affordable.

  5. Regina Says:

    A lot of LTC companies offer both daily and monthly benefits. The monthly benefits are a higher premium then the daily but when you calculate 365 days to the daily benefit compared to 12 months to the monthly you get more money over the year for the daily benefit. Why is the monthly benefit a higher premium for less money and what is the benefit of going with the monthly or daily benefit?

  6. Duane Lipham Says:

    This is a very good question, Regina. With some policies, the monthly home healthcare benefit is equal to 31 times the daily benefit (regardless of how many days there are in the given month.) With other policies, the monthly home healthcare benefits is equal to the number of days in that particular month times the daily benefit. In either case, over the course of a year, the monthly home healthcare benefit would pay at least as much as the daily benefit times 365.

    I, personally, don't think it's worth spending a lot of extra premium for a monthly home healthcare benefit versus a daily benefit.

    Some in the insurance industry think that there are great advantages to a monthly benefit, because a monthly home healthcare benefit would pay more each month, if, on certain days of the month your care cost less than the daily benefit and on other days your care cost more than your daily benefit. However, it's rare to have large fluctuations in the costs of receiving personal care at home. That is why I rarely advise my clients to spend the extra premium for the monthly home healthcare benefit. I recommend instead that they simply increase their daily benefit. For example, for about the same premium, I'd rather have a daily benefit of $150, than a monthly benefit of $4,200.

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