Questions we are most often asked
You may have planned for your children’s college expenses, your retirement, and the legacy you want to leave loved ones. But have you created a plan to take care of you? As we are now living into our 80’s, 90’s and even 100’s, it’s becoming more and more likely we will need help with care. Exploring your funding options today for a future extended care event can provide benefits to both you and the ones you love. Here are answers to some commonly asked questions to help you start thinking about your preferences for a plan.
First and foremost…what is long-term care?
Long-term care is the assistance someone needs to do basic daily activities. As we age, needing this type of assistance is quite common1, or it could be the result of a chronic health challenge or cognitive impairment.
What is long-term care insurance?
Long-term care insurance is a tool that provides you with a dedicated source of funding for long-term care costs. It reimburses the policy owner for qualifying expenses if a chronic health challenge (physical or cognitive) leaves them needing help with daily activities.
How much can long-term care services cost?
Long-term care services costs vary by region. According to New York Life’s 2014 Cost of Long-Term Care Survey2, the average hourly rate for a home health aide runs about $22 per hour. For people who can’t or don’t want to stay in their own home, an assisted living facility may be the next best option. According to our 2014 Cost of Care Survey, the average monthly cost for a one bedroom unit in an assisted living facility is $4,139 per month or nearly $50,000 per year. The average annual cost of nursing home care in a private room is $95,706 per year. Typically, people use a combination of services/facilities in their lifetime. Using these average figures, three years of assisted living plus two years of nursing home care could cost more than $300,000.
How can I design a policy that suits my budget?
When it comes to long-term care protection, a little can go a long way. We can show you how to use a combination of planning methods to achieve your personal goal. Our policies can be customized by adjusting the policy options listed below. Using these options, we will help you create a plan that fits both your budget and your specific needs:
- Level of coverage
- Length of waiting period
- The inflation option selected
- Any additional riders.
Plus, New York Life LTCi offers:
- Discounts: Partners and spouses, as defined by our policy, may be eligible to receive a premium discount; conditions and availability vary by state.
- Three-year rate guarantee: Where applicable, all new policies come with a three-year rate guarantee.3
- Dividend eligibility: Though dividends are not guaranteed, a big differentiator between us and many other issuers is that a policy with New York Life becomes dividend-eligible after its in-force for a predetermined period and this is applied against your premium. Over time, this could reduce your premium payments significantly.
For more information on designing a policy, click here.
When should I buy long-term care insurance?
The time to plan for long-term care is now. The cost of purchasing a policy is based on your age and health and the longer you wait, the more the price increases. It’s important to obtain coverage when you are younger and healthier and more likely to be approved.
How does the underwriting process work?
Depending on your age and where you live, the underwriting process includes one to three steps, which are:
- Medical records review
- A telephone interview and/or
- A face-to-face assessment.
The process from application submission to when a decision is communicated takes an average of three weeks but may vary if there is a delay in collecting medical records or in conducting the telephone interview or face-to-face assessment. The first step in facilitating a quick review is to ensure your application is fully completed and accurate and includes information about any existing conditions and medications.
How does my current health affect my ability to gain coverage?
LTCi premiums are calculated based on your health and the age at which you apply. Applying at a younger age when you are healthier can result in lower premiums and can increase the likelihood that you will be approved for coverage. Applicants are underwritten to determine insurability and rate class.
What are the tax advantages of long-term care?
Tax laws at both the federal and state levels may provide incentives for individuals and businesses to purchase qualified long-term care insurance policies. Our most recent policies are considered “qualified” and may be eligible for favorable tax treatment, where available. Also, policy benefits received by the policyholder at the time of claim are received tax-free.4
Does my private health insurance, Medicare, or Medicaid cover long-term care costs?
Long-term care services are not generally covered by private health insurance. Limited long-term care services may be covered by government-run programs such as Medicare and Medicaid, but these programs have strict qualification rules and coverage limitations.
Medicare: May cover up to 100 days of skilled nursing home care if certain conditions are met, but it's not designed for the long-term. Medicare does not pay for homemaker services or home health aides, nor does it pay assisted living costs.
Medicaid: Skilled nursing home services, and some home and community-based care for low-income Americans may be covered, but beneficiaries must meet strict federal and state guidelines for income and assets. So, you may need to start by paying out-of-pocket and qualify only after you spend down enough of your assets. And your options may be limited, as not all nursing homes accept Medicaid patients, and Medicaid may restrict which nursing homes are available to patients.
Will I lose my premium payments if I don’t use them?
With the optional Legacy Benefit Rider—selected at time of purchase, where available, and at an additional cost—the premiums you’ve paid, minus any money paid out, can be returned to your estate after you pass away.
Why New York Life?
- In business for more than 170 years
- Fortune 100 company
- In LTCi business for more than 25 years
- Leading LTCi provider based on premium/market share5
- Helping more than 138K LTCi policyholders6
- Paid over $80M in LTCi claims in 2014
- Highest financial strength ratings currently awarded to life insurers from all four of the major ratings agencies.7
- Knowledgeable Agents
- Dividend eligible LTCi policy8
- Discounted rates for approved groups
- Flexible long-term care insurance policies for most budgets.
1American Association for Long-Term Care Insurance, 2014 Sourcebook.
2New York Life Cost of Care Survey, 2014, http://www.newyorklife.com/products/Long-Term-Care/nyl-costs-of-ltc-survey
3A three-year rate guarantee is not available in all states. We reserve the right to increase rates in the future.
4Neither New York Life Insurance Company, its subsidiaries, nor any of its Agents are in the business of offering tax, legal or accounting advice and nothing contained herein is, or should be construed as, legal, tax, or accounting advice. Clients should always consult with their independent professional advisors to seek advice on the applicability of this information to their particular circumstances.
5LIMRA End of Q4 2014 LTCi Market Share
6New York Life Insurance Company End of Q4 2014.
7A.M. Best (A++), Fitch (AAA), Moody’s Investor’s Services (Aaa), Standard & Poor’s (AA+). Source: Individual Third Party Ratings Reports as of 3/26/15. This report indicates the overall financial status of companies at a particular date.
8Dividends are not guaranteed.
The purpose of this material is solicitation of insurance. An insurance Agent may contact you. Long-term care insurance is issued on policy form ICC14-LTC6. The policy has exclusions and limitations. For costs and complete details of the coverage, contact your Agent or the company. A medical exam may be required. New York Life Insurance Company 51 Madison Avenue, New York, NY 10010.