Standardize

If you want a new lawn mower, you can go to the store and purchase one pretty easily. That’s because, for the most part, lawn mowers are fairly standardized. True, some have more features than others, but they’re all going to do essentially the same thing. This is true with so many facets of American life that it’s easy to believe everything is standardized enough to allow easy shopping. That’s not the case when it comes to Long Term Care Insurance.

Long Term Care Insurance (LTCI) is inherently complex, largely because long term care itself is complicated and individualized. Everyone ages in different ways, comes from unique socioeconomic backgrounds, and has specific individual goals. As a result, LTCI should be individually tailored to be the most effective. This leads to an often confusing set of options, which is the reason it’s always wise to work with a specialist.

Some Aspects of a Plan Are Standard, but Many Are Not

Some aspects of LTCI are relatively consistent, as they are often governed by federal regulations and state law. For example, one thing that is the same in nearly every LTCI plan is the criteria for activating your benefits. In today’s modern plans, benefits are triggered by something called Activities of Daily Living. There are six of these activities – bathing, dressing, transferring, toileting, continence and eating (and eating means bringing the fork to your mouth, not cooking). If a person cannot perform at least two out of these six tasks, you are benefit eligible and can initiate a claim. 

You can also trigger the benefits if you are diagnosed with a severe cognitive impairment.  This means a medical professional has made a formal diagnosis (through examination and tests) of a severe cognitive impairment, such as Alzheimer’s or dementia.

However, what those benefits look like can vary greatly from plan to plan. This flexibility adds needed personalization to LTCI options, allowing individuals to maximize benefits in a way that’s congruent with their lifestyle and goals. 

This is true when it comes to both traditional and hybrid LTCI plans.

Tailoring Traditional Standalone LTCI Policies

Many standalone LTCI policies have common features, such as using a reimbursement model for benefits at claim time. However, these benefits can be tailored to fit individual needs. For example, a client in their 70s may prefer a larger starting benefit without an inflation rider, ensuring substantial coverage if care is needed sooner. Younger clients, on the other hand, might choose a smaller initial benefit with an inflation rider, allowing coverage to grow over time.

Clients may also make selections on options such as: 

  •  Monthly or Daily Benefit Amount
  • Benefit Period (number of years of coverage)
  • Elimination period options (acts as a deductible for LTCI)
  • Inflation protection (so your benefits grow over time)
  • Shared Care Benefit (sharing some benefits with your spouse/partner)
  • And more

Tailoring Hybrid Asset-Based LTCI Policies

The same type of customization must occur when one is creating a hybrid asset-based LTCI policy. Hybrid policies combine LTCI with life insurance policies, meaning that if you don’t use your LTCI benefits, those benefits are eventually paid out as life insurance to your heirs.

Some areas in which you may require customization may include:

  • The amount of the death benefit: A higher death benefit will result in higher premiums, so this is typically balanced to your goals and financial situation.
  • What international coverage might look like: This is especially important if you intend to do a lot of traveling or retire overseas.
  • The cash value of the plan and the return on premiums you may experience: This is because hybrid plans are structured differently than traditional plans.
  • And more

Things to Consider in All Types of LTCI Policies

There are some factors that must be considered no matter what type of LTCI policy you are interested in. For example, many plans stipulate who can provide care.  If you purchase a reimbursement plan, then you will be expected to hire a licensed caregiver (facility or home care agency).  However, if you purchase a cash indemnity plan, you have much more flexibility on who provides care. With an indemnity plan, once your claim is approved, your insurance carrier will pay out the maximum benefit and you can hire whomever you want (non-licensed, family, private nurse and so on).  Knowing this (and exerting some influence on this) ahead of time can help you make sure your LTCI benefits align with your care goals.

What We Mean By LTCI Specialist

Our point of view is this: a specialist in Long Term Care Insurance is someone who spends the majority of their time working with individuals and families to find the best Long Term Care Insurance (LTCI) option for them. We’ve been specializing in LTCI for 50 years. It is, by far, the majority of what we do. We know the ins and outs of all Long Term Care plans. That’s because we do it all day – every day.

By comparison, there are many businesses that offer many types of insurance along with LTCI. LTCI is a minor part of what they do. While we respect them and the value they offer their clients, we know how much time and effort it takes to stay current in LTCI. We also know it’s unlikely that they can keep up as much as us because of the other lines of insurance that take up their time.

For someone unfamiliar with the world of LTCI, the complexity and required customization of these plans is often overwhelming. That’s why it’s essential to work with an expert who can guide you through your options and the ever-changing landscape of the LTCI market. At Gordon Associates, our team has decades of experience helping clients find the right plans.

Make sure you get a policy that will take care of you. Contact us today!

 

On August 25, 2025   /   Blog