Pooled Benefits: There is more than
one type of Pooled Benefit. Keep the following information in
mind when reviewing the different types of Long-Term Care
Scenario 1: When purchasing LTC,
you create your initial pool of money with your choice of daily
benefit and benefit period. This pool of money is used for most of
the services and care available in the LTC policy. Some benefits do
not reduce the pool of money, but have their only separate amount/pool
available. All benefits taken from one pool of money. For Example: If
you have a 3 year benefit period at $150.00 a day and you are only
using $75.00 a day for home care, assuming you continue to use the
same $ amount, your policy benefits should last for 6 years.
The first long-term care policies made available had separate pools
of money for Home Health Care and Nursing Home Care. When you
depleted your Home Care portion of your benefit, your benefit would
stop until you entered a Nursing Home. At that time, you would start
receiving benefits again.
Scenario 2: A single pool of
money can be available for more than one person. This could be a
husband and wife sharing a policy or a rider on their individual
policies combining their pools of money to be shared between them.
You can also have a pool of money shared by several family members
under one contract.
Types of Long-Term Care Policies Available
Private insurance companies sell long-term care insurance policies.
You can obtain these policies in many different ways:
Individual Long-Term Care Policies: One insured and one pool of money
Individual Long-Term Care (National
Partnership) Policies: One insured and one pool of money.
Provides Dollar for Dollar Asset Protection. This policy is exactly
the same as the individual LTC policy listed above, but it meets
Approved by the state and launched by the carrier as a Partnership Approved policy, and
The policy meets the age-based / inflation guidelines mandated by the National Partnership Program.
See program details...
Individual Long-Term Care with Shared
Benefit Riders: Two LTC insurance policies (husband & wife or
partners) that have their own individual policies but have purchased a
benefit rider that combines their pools of money. Example: Husband
purchases a 2 year benefit ($100 a day) = $87600 (pool of money),
spouse purchases a 2 year benefit ($100 a day) = $87,600 (pool of
money) and they both purchase the Shared Rider. Now they have created
a total pool of money of $175,200 to be used by one of them, both of
them at the same time, or one of them and then the other until the
pool is deleted. The benefit of this type of plan is you have a
greater chance of using the benefit if it’s covering two people. If
the husband goes on claim and uses 3 years, passes, then the spouse
would have the remaining year for her use. Each carrier runs their
program a little different, so you need to determine exactly how the
rider works before purchasing. There is an additional cost for this
rider because the carrier is at greater risk for paying a claim.
Joint Long-Term Care Policies:
This is one policy with more than one insured. This can be a husband
and wife or partners. It can also be several people from one family
sharing one plan. The guidelines of the available plans are dictated
by the carriers. They all vary to some degree.
Individual Long-Term Care Offered
Through Employers: These are individual LTC policies offered by
an employer as either an employer paid or voluntary benefit. There is
usually a 5 or 10% discount involved depending on the program offered.
These discounts are usually in addition to any other discounts
available (spousal or preferred) depending again on program being
Individual Long-Term Care Offered
Through Associations: These are individual LTC policies offered
by an Association on a voluntary basis. There is usually a 5%
discount involved depending on carrier's discount program. These
discounts are usually in addition to any other discounts available
(spousal or preferred) depending again on carrier.
Group Long Term Care (Certificate
Policies): When an Employer offers long-term care insurance to
their employees either as an employer-paid benefit or on a voluntary
basis, the employer chooses which benefits are being offered. The
employer also owns the Contract and the Participating Employees all
obtain a certificate of coverage. These policies are usually
portable…meaning if you leave the company, you can keep the insurance
but you must begin paying the premiums. In many cases, an individual
long-term care policy can compete with this type of plan on home care
benefits and for the individual that could be issued a regular policy
with a preferred health discount. Group plans have a rate chart based
on the ages of the eligible group, which can work against a preferred
Life Insurance Policies: Some
companies let you use your life insurance death benefit to pay for
specific conditions such as terminal illness or for qualified
long-term care expenses such as home health care, assisted living, or
nursing home care. A life insurance death benefit that you can use
while you are alive is known as an accelerated death benefit.