Arvin D. Pfefer - Senior Advisor

Long term care can be covered completely or in part by long term care insurance.  Most plans let you choose the amount of the coverage you want, as well as how and where you want to use your benefits.  A comprehensive plan includes benefits for all levels of care, custodial to skilled.
Unlike many types of insurance which can protect against 100% of losses, long term care insurance should not be viewed as “100%” coverage for all long term care needs.  

When considering long term care insurance, it is imperative to understand how to balance the cost of premiums with one’s expectations of coverage.  Simply put – many individuals find that they cannot afford the premiums to provide 100% coverage of all long term costs.

With this in mind, we help our clients to assess their individual needs and provide appropriate coverage by accounting for other factors including Social Security benefits, pension plans and IRAs.

Choosing an Agent

It would always be in your best interest to find an agent/broker that represents at least five or six companies.  Many agents are “captive” which means that they work for one company and in some cases these companies even provide them with prospects for long-term care insurance.

Also, the company they represent may be an excellent carrier but not afford you with some “built in” benefits that other companies provide.

“Captive agents” are paid a higher commission and other “perks” such as awards or trips.

Independent brokers have no allegiance to any one company and therefore will be more objective in helping custom design a plan that fits your exact needs and is affordable.

What type of long term care insurance is available?

The rationale for purchasing long term care insurance is similar to that for most insurance: you pay an affordable premium that helps offset the risk of a much larger out-of-pocket expense.  There are different approaches available to accomplish this.  We will consider a few of them.

Most of the traditional long term care policies available right now are reimbursement policies and this is also discussed in my brochure “Considerations”.  This means that they reimburse you for your long term care expenses, up to the dollar amount you choose, for each day you receive specified care in a nursing home, the community, or your home, based on your policy limitations.  This is often referred to as a pooled benefit approach.

Another type of traditional long term care policy some companies offer is an indemnity policy or rider, which would pay a fixed dollar amount on any given day of service up to the policy limits, regardless of the cost of your care.

What features should I consider when purchasing long term care insurance?

When you are considering long term care insurance, there are several choices you need to make and several options you should weigh.  I have listed them here to help you design a policy that’s right for you.  NOTE: There is a difference between policy benefit design and policy rider’s/options.  Rider’s and options cost additional premium dollars!

  • Daily Benefit: This is the amount a policy will pay out per day.  Be sure to check the average costs for nursing home and home care in your area.  I prefer policies that will pay you the benefit on a monthly basis versus a daily benefit: much more flexible.
  • Waiting Period: You can compare this feature to the deductible on your health insurance policy.  You will need to decide how long you’re willing or able to pay for your care out-of-pocket before the policy starts paying.  Most insurance companies offer waiting periods ranging from zero days, 20 days, 30 days, 45 days, 60 days, 90 days and 180 days.  Of course the longer the waiting day, the less the premium will be.
  • Benefit Period:  This is how long the insurance company will pay for your care.  Again, most insurance companies offer a range of choices from a year to lifetime, or unlimited care.  If you choose a three year benefit period, for example, your policy will pay for three years of care, after which you’ll start using your own money if you still need care.  Depending on daily benefit amounts used, your policy may actually pay longer than the specified period because benefit maximum is actually determined by multiplying the number of days you need care (1,095 days in a three year plan, for example) times the daily benefit.  A three year plan with a $100 daily benefit creates a benefit maximum of $109,500 for example.  If your daily charge is ever less than the daily benefit, the remainder stays in the pool of dollars and can extend your benefit period past the three years.  The extension is not possible under an indemnity policy.
  • Home Health Care:  Many people who need long term care would prefer to receive it in the comfort of their home.  This feature provides benefits for a home health aide or for licensed health care professionals to help you at home.  It may also pay for adult day care.  This benefit can actually help you avoid a nursing home.  NOTE: Never buy a policy that provides for less than a 100% of the daily or monthly benefit for home health care.

How do I choose a long term care insurance policy?

When you are shopping for long term care coverage, be sure to take all the time you need.  Ask questions and make sure you understand all the provisions.  Marketing or sales literature is helpful, but ask to see the actual policy for a summary of benefits or an outline of coverage and read it before you buy.  Also ask the agent to provide timely printed information on the company’s financial ratings.  NEVER PURCHASE A POLICY DURING THE FIRST MEETING WITH THE AGENT.  Policy features and financial ratings can vary dramatically from one company to another.

Sometimes people file complaints when they have been “rated” or rejected on their application for long term care insurance due to diabetes, strokes, asthmas, arthritis and various other ailments and most insurance agents know that these cases will be “rated” or declined.  However, no one seems to ever complain when they pay extra for auto insurance due to a few DWI’s!

The problem is that some consumer magazines advise people to wait until they are 65 to purchase long term care insurance because these articles led people to believe that this form of coverage will be readily available “when they need it”!

There is only one way of guaranteeing that the insurance company will issue the policy: apply for it when you are in good health.

Click on a question below to bring up a new page and see the answer Read More _______________________
What is long term care?
I'm healthy, I won't need long term care, or will I?
Is long term care expensive?
But doesn't my health care already cover long term care?
But won't Medicare cover long term care?
I recently read that Medicare is now covering Alzheimer's Disease. Is this true?
But won't Medicaid cover long term care?

Arvin D. Pfefer, Senior Advisor, works with the following Insurers:


A cost illustration is a quote showing the benefit schedule and the premium.  Click here to see examples___

  1. "Where does the Population Live and Who Cares for Them? LTC: Diverse, Growing Population Includes Millions of Americans of All Ages," U.S. General Accounting Office 1/01.
  2. "The National Nursing Home Survey," National Center for Health Statistics, U.S. Department of Health and Human Services, June 2002.
  3. The Mature Market Institute, "MetLife Market Survey of Nursing Home and Home Care Costs", 2005.
  4. The MetLife Market Survey of Assisted Living Costs; October 2005.
  5. The MetLife Market Survey of Nursing Home & Home Care Costs; September 2005.
  6. ACLI Study, Can Aging Baby Boomers Avoid the Nursing Home?", March 2000, page 15
  7. Mebane, F. , Want to Understand How Americans Viewed Long-Term Care in 1998? Start with Media Coverage, The Gerontologist, Vol. 41 No.1, p. 24, February 2001.
  8. "Can Aging Baby Boomers Avoid the Nursing Home?", Stucki, B. and Mulvey, J., American Council of Life Insurers, March 2000, page 15
  9. Long-Term Care: Medicaid's Role and Challenges (publication #2172) The Henry J. Kaiser Foundation, November, 1999
About Arvin - Long Term Care Basics - LTC Insurance - Life Insurance - Contact Information - 2006