North Carolina’s Online Resource for Long-Term Care Insurance
North Carolina’s online resource for NC Long-Term Care Insurance. Whether you or someone you know has had a loved one enter a Nursing Home or Nursing Facility, you understand the enormous costs associated with Long-Term Care. A properly structured Long-Term Care Insurance Policy can make sure these costs are manageable. Whether you want to find out more about Long-Term Care Insurance, or if you are looking for an alternative to Long-Term Care Insurance, or to simply obtain a Long-Term Care Insurance Quote, you’ve come to the right place.
Why is NC Long-Term Care Insurance Important?
Long Term Care Insurance is designed to pay some or all the costs of nursing home, community or home health care when you cannot meet the needs of everyday living on your own. Long Term Care has always been an issue, however, as the population of the United States lives longer today than it did just 20 years ago, the need for Long Term Care has increased. Long Term Care Insurance has two purposes:
- To protect the lifestyle of your spouse and/ or family from the high cost of Long Term Care
- To protect your assets for your heirs
When purchasing Long Term Care Insurance, you should purchase as much coverage as you can reasonably afford. All too often, Long Term Care Insurance buyers will fail to ask the tough questions about the exact benefits their policy provides. There are agents and advertisements which prey on the Senior Market, while these practices tend to give all Advisors a bad name, there are honest and trustworthy Advisors that can help you understand the Long Term Care Insurance Policy.
The State of North Carolina is a progressive state when it comes to the regulation of Long Term Care Insurance. The following are requirements of all North Carolina Long Term Care Insurance Policies & North Carolina Long Term Care Insurance Sales & Practices.
- There can be no requirement for a prior hospital or skilled nursing home stay as a trigger for benefits
- All pre-existing conditions must be covered after six months
- Policies must be issued in a guaranteed renewable basis
- Portability is required for all group contracts
- A meaningful inflation protection must be offered
- Whether expressed or implied, no high pressure sales tactics are allowed
- After age 65, no attainable age rating is allowed
- Policies must provide at least three levels of care for at least 12 months
- Policies must be issued free of exclusionary riders
- Policies cannot require that home health care be provided by an RN or LPN
- All policies must have a 30-day “free look” provision
- Clinical diagnosis must be accepted on all organic brain disorders
- Annual lapse and financial reports must be filed with the Insurance Commissioner
- Third-Party notification is required to prevent loss of coverage
- Rate revisions must be approved prior to implementation
- Insurance Agents selling Long Term Care Insurance must pass a supplemental exam
- No new waiting period for pre-existing conditions is required when replacing policies
- Advertising policies must be accepted by the Insurance Commissioner prior to use
THE HEALTH INSURANCE PORTABILITY AND ACCOUNTABILITY ACT (HIPPA) OF 1996
The Health Insurance Portability And Accountability Act (HIPPA) of 1996 established that Long Term Care Insurance Policies meeting certain standards are referred to as federally “tax-qualified” plans and offer certain federal tax income advantages. The Act requires that the policy and the Outline of Coverage both state that the policy is a qualified Long Term Care Insurance Contract.
REQUIREMENTS FOR QUALIFYING AS A TAX QUALIFIED LONG TERM CARE INSURANCE CONTRACT
To be federally qualified, a Long Term Care Insurance Contract must meet the following criteria:
- Must be guaranteed renewable and cannot have a cash surrender value
- There must be an offer of nonforfeiture benefit
- Individuals must be unable to do two activities of daily living (ADL’s) without substantial assistance
- For cognitive impairment to be covered, a person must require substantial supervision
- Disability must be expected to last for at least 90 days, and verification must be from a certified health care provider
BENEFITS OF A TAX QUALIFIED LONG TERM CARE INSURANCE CONTRACT
- In a tax qualified Long Term Care Insurance Policy, out-of-pocket Long Term Care expenses will be allowed as itemized deductions to the extent that they and other unreimbursed medical expenses exceed 7.5% of adjusted gross income.
- Benefits paid under a federally qualified plan are not taxable if the amount paid does not exceed the federal per diem of $175. Policies paying benefits based on actual incurred amounts are also exempt from taxation.
Consult with a tax advisor if you have questions about how tax qualified policies could affect you. Policies approved as Long Term Care Insurance before January 1st, 1997 are grandfathered under the HIPAA Act; therefore, premiums paid for these policies are also subject to favorable tax treatment.
The premium for a Long Term Care Insurance Policy are based on the following (assuming you qualify medically for a Long Term Care Insurance Policy):
- Your Age At Policy Purchase – The younger you are when you buy the policy, the less you pay.
- Elimination Period – An Elimination is basically a Deductible. The longer you elimination period, the less your premium.
- Benefits & Duration – A person must stipulate a daily benefit amount and a benefit period. Thus, the larger your daily benefit and the longer the benefit period, the more your premium(s) will be.
- Riders – A Long Term Care Insurance Policy has many “Riders” available to enhance your coverage. As can be expected, the more riders (more coverage) the more your premium will be.
A recent survey conducted by Genworth Financial stated that the average cost for a private nursing-home room is $74,208 a year ($203 a day). The scary findings of the report show that if the cost of care continues to rise at its current pace (4% a year), then a one year stay in a nursing home could be more than $270,000 per year only 30 years from now. While this is a national average, you can see that the cost of a nursing home stay could be financially draining to a family.
Genworth Financial’s website allows you access to their cost of care survey so that you can determine the amount of coverage you would need for your particular area.