Page 9 - Leisure Living Magazine July 2018

Choosing A Long-Term Care
Solution With Life Insurance
By Christine Johnston, Nemecek Insurance & Financial Services c.johnston@nationwide.com
Choosing the right life insurance policy for your needs is important; however, even more care should be taken when adding riders to your policy to provide extra benefits. A Long- term Care rider (available at an additional cost) is a living benefit that lets you collect your own death benefit to help pay the costs associated with long-term care. One advantage of combining your long-term care (LTC) coverage with life insurance is that a benefit will be paid no matter what direction your life takes. If you never need long-term care or only need to use a small amount of your benefits, your beneficiary receives the funds you did not use as a federal income tax-free death benefit. But if you do need long-term care, the death benefit will provide you a tax-free monthly long-term care benefit. Keep in mind however, not all riders you may look at for long-term care needs are alike. It’s important to understand what LTC needs will be covered, what guarantees are offered and how your benefit will be paid.
You may be aware of the price hikes taking place with traditional long-term care policies and may wonder, “Is there a way to lock in policy costs?” The answer is yes, it is possible! Some companies offer life insurance policies that will guarantee the premium can never go up in price – and that guaranteed premium includes your long-term care rider – meaning you never have to worry about an increase in premium.
Many LTC riders also offer guarantees to assure your policy can’t lapse while you are collecting your long-term care benefit. But make sure you understand the guarantees. Some companies will not honor these guarantees unless you are getting care in a nursing home or assisted living facility, which means for instance, the guarantees, would not apply if a nurse was caring for you in your home. In addition, some policies only honor guarantees if you own your own policy, so you would not have guarantees if your policy was purchased for you by one of your adult children, for example.
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Can the difference between indemnity and reimbursement benefits really affect what I can use my LTC benefit for? Yes, it can. Reimbursement payouts, no matter what the maximum benefit is, will never pay more than the qualifying LTC expenses you incur. And qualifying expense in reimbursement plans may not include the costs of home modifications, certain medical equipment, transportation to therapy, nor many of the other expenses that go along with long-term care needs.
An indemnity payout however, will pay the maximum benefit allowed, no matter what your expenses are. With some companies, no monthly bills or receipts have to be turned in while on claim. Excess benefits not needed to pay for your care can be used for any other personal needs you may have. Because full benefits are paid with an indemnity benefit plan, in addition to paying your LTC expenses, you could use excess benefit money to purchase medical equipment or pay deductibles on medical bills, pay bills not covered by other sources, upgrade your home with safety and accessibility features helping to remain in your home longer, hire help to keep your home clean and maintained or even help pay LTC costs your spouse may have (if you are currently on claim yourself ).
There is a lot to consider when choosing a long-term care solution attached to life insurance. A Certified Long-Term Care (CLTC) professional can help you make an informed choice that may provide you the opportunity to add flexibility, predictability and guarantees to a policy that you and your family will appreciate.
Christine Johnston is a licensed Insurance Agent with Nationwide’s Nemecek Agency in Port Clinton, Ohio. She has worked in the financial Services Industry for 25 years and focuses on retirement preparation for mature clients. She holds the Certification in Long-Term Care (CLTC) designation. C.johnston@nationwide.com
Securities and Investment Advisory Services offered through Nationwide Securities, LLC., member FINRA, SIPC and a Registered Investment Advisor. DBA Nationwide Advisory Services, LLC. in AR, CA, FL, NY, TX and WY. Representative of Nationwide Life Insurance Company, affiliated companies and other companies FEM-6438AO (6/18)
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