Long Term Care Insurance

(Revised January 2014)

The California legislature requires the Insurance Commissioner to annually prepare a Consumer Rate Guide for long-term care insurance. This website consists of an overview of long-term care insurance, the types of benefits and policies you can buy, both as an individual and as a member of a group, information on what to consider before purchasing a policy and the premium rate history of each company that sells long-term care insurance in California.

This website will help answer some of your questions about long-term care insurance. It explains why people may need long-term care and how this type of insurance can help cover the cost for care. Long-Term Care policies most often pay for benefits on a reimbursement basis which means that the payment will be made to you after you have received the covered care and/or incurred the costs and submitted a claim. However, there are some policies (typically more costly) that will pay a cash benefit. It is important to understand the coverage provided and how benefits will be paid/reimbursed before you purchase a long-term care insurance policy. When you receive your policy, be sure to read it and ask questions if there is anything in the policy that you don't understand. The Rate Guide explains how long-term care insurance is structured and what benefits you can buy. A qualified long-term care insurance agent or the Health Insurance Counseling and Advocacy Program (HICAP) can help you with these questions and many others.

• The California Department of Aging publishes a booklet on long-term care called "Taking Care of Tomorrow" that provides more in-depth information on a broad spectrum of long-term care issues. Agents must give you a copy of it when they attempt to sell you a long-term care insurance policy. That booklet is also available from your local HICAP project.
• HICAP is the Health Insurance Counseling and Advocacy Program sponsored by the Department of Aging and funded in part by the Department of Insurance. It provides free counseling on long-term care insurance, as well as on Medicare and Medicare supplement policies. Call 1-800-434-0222 to find the local project in your community.
• The National Association of Insurance Commissioners (NAIC) also publishes a booklet called "A Shopper's Guide to Long-Term Care Insurance." It is available by calling the California Department of Insurance at 1-800-927-HELP (4357). There are detailed worksheets in the NAIC publication that may help you choose the coverage you need.

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What is Long-Term Care?

• Long-term care involves the assistance or supervision you may need when you are not able to do some of the basic "activities of daily living" (ADLs) which are, generally, eating, continence, bathing, dressing or moving from a bed to a chair. You might need assistance with ADLs if you suffer from an injury like a broken hip, an illness, a stroke or from advanced age and frailty. Other people may need long-term care because of mental deterioration, called "cognitive impairment" that can be caused by Alzheimer's Disease, other mental illness or brain disorders.
• Long-term care is sometimes called "custodial care" or "personal care." Formal long-term care (the kind of care you must pay for) is provided by skilled and unskilled workers. Unskilled workers are sometimes supervised by skilled medical personnel such as registered nurses. Informal long-term care is frequently provided by unpaid family members and friends.
• Long-term care services can be provided in your own home, in a community program like an Adult Day Care Center, in an assisted living facility licensed as a Residential Care Facility (RCF) or a Residential Care Facility for the Elderly (RCFE) or in a nursing home.
• Long-term care is not necessarily "long term." Some people only need long-term care for a few months, for example, while recovering at home from a broken hip, while others may need care for the rest of their lives.

Will I Need Long-Term Care?

Your personal risk of needing long-term care depends on many factors. Some of those are how long you may live, your health history and whether you have a spouse or family members who can provide some of the care you may need. If you feel you have a greater risk, you may want to consider applying for coverage while you are still able to qualify.

How Much Does Long-Term Care Cost?

The cost of care in the future will be much higher than it is today. California nursing home rates increased at an average rate of over 5% per year during the past twenty years and are likely in the future to continue to increase by at least 5% per year. A 5% annual increase means a year of care that costs $50,000 today will cost twice that amount in 14 years, or $100,000 a year.

Source: Issuers Bulletin for 2002, California Partnership for Long-Term Care, based on data from the California Office of Statewide Health Planning and Development.

Who Usually Pays for Long-Term Care?

• Medicare may pay for skilled care in a nursing home for a very short period of time but no longer than 100 days and only when the patient meets all the Medicare requirements for daily skilled care. While people do get personal care services at the same time, Medicare will not pay unless there is also a need for daily skilled services that only a nurse or therapist can provide. Medicare may pay for some personal care services at home but again, only if you also need skilled care on a daily basis that only a licensed person can provide. For more details, see the Medicare benefits book available from your Social Security office or by calling the Social Security Administration toll-free at 800-772-1213.
• Medi-Cal (called Medicaid outside California) pays for necessary health care that is not covered by Medicare but only if you meet federal and state poverty guidelines. You can get the most current information about Medi-Cal from your local county Department of Social Services, legal services Program or an elder law attorney.
• Personal Resources are commonly used by most people to pay for long-term care expenses. These funds come from personal income and resources. When care is provided by family members and friends at home, necessary skilled care such as equipment, transportation and other costs not paid by Medicare are also paid from the patient's personal income or savings. People who use up their assets paying for long-term care are "spending down" and may become eligible for Medi-Cal as a result.
• Long-Term Care Insurance is designed to pay or reimburse covered long-term care costs. It is very important to understand the coverage provided and how benefits will be paid/reimbursed before you purchase a Long-Term Care Policy. Long term-care insurance is available from insurance companies selling in California and may be cost effective for you if you have sufficient available income to pay the premiums.

What is Long-Term Care Insurance?

Depending upon the type of policy, long-term care insurance can cover any of the following: Care in a Facility that is not an acute-care hospital. Some of the terms used to describe "facilities" that can provide long-term care services include nursing homes, Residential Care Facilities and Residential Care Facilities for the Elderly (sometimes called Assisted Living Facilities), skilled nursing facilities or Intermediate Care Facilities. Home Care including Home Health Care, Personal Care, Homemaker Services, Adult Day Care, Hospice Services or Respite Care. (Some Hospice and Respite care can also be received in a facility like a nursing home).

In California, only 3 categories of long-term care insurance policies can be sold. Each policy is labeled as:

1. Nursing Facility and Residential Care Facility Only. These policies cover skilled, intermediate or custodial care in a nursing home or similar facility and assisted living care in an Residential Care Facilities/Residential Care Facilities for the Elderly. Home care is not covered or
2. Home Care Only. These policies are required to cover Home Health Care, Adult Day Care, Personal Care, Homemaker Services, Hospice Services and Respite Care but care in a Nursing Facility or Residential Care Facilities/Residential Care Facilities for the Elderly is not covered or
3. Comprehensive Long-Term Care. These policies cover nursing facility care, assisted living care in an RCF/RCFE and home and community care. These policies must include at least 8 benefits: a nursing home benefit, an Residential Care Facilities/Residential Care Facilities for the Elderly benefit for assisted living and the 6 home care benefits: Home Health Care, Adult Day Care, Personal Care, Homemaker Services, Hospice Service, and Respite Care.

The California Partnership for Long-Term Care (the Partnership), a program of the California Department of Health Care Services (DHCS), is an innovative partnership among consumers, the State of California and a select number of insurance companies, plus the California Public Employees Retirement System (CALPERS). These insurers offer a special type of long-term care insurance policy, commonly called "Partnership" policies, that must meet certain requirements set by the DHCS. Insurance companies participating in the Partnership program must have their Partnership policies approved by both the Department of Insurance and the DHCS. Additionally, only insurance agents who have received special training are able to sell you a Partnership policy and to advise you as to whether the Partnership program works for you. Be sure to confirm that your agent has this special certification to sell Partnership policies.

Each Partnership-approved policy includes insurance benefits to cover the care you may need and automatic inflation protection to ensure that the benefits keep pace with the rising cost of care. Partnership policies also have other important features that are not required in other long-term care insurance policies. To learn more about these policies and the companies that are approved to sell them, call the Partnership for free brochures at 800-CARE445 (800-227-3445).

What is a Tax Qualified Long-Term Care Policy?

Congress passed legislation effective in 1997 that established the tax treatment of premiums paid for and the benefits paid/reimbursed by long-term care insurance policies that met certain federal standards. This legislation is called the Health Insurance Portability and Accountability Act or HIPAA. Long-term care policies that use the federal standards to cover benefits are labeled as "Federally Tax Qualified". Some or all of the premiums for these federally tax qualified policies may be deductible as a medical expense on your federal and California income tax returns (depending on your age and the amount of annual premium).

Policies sold as federally tax qualified long-term care insurance use a standard of eligibility for benefits that may be stricter than the standards established in California for non-qualified policies. It may be easier to qualify for benefits from non-tax qualified policies that use the standards established by California.

If you have questions about the tax status of a policy you own or one you are considering buying, your long-term care insurance agent can advise you. If you have specific questions pertaining to how the purchase of tax qualified long-term care insurance will impact the deductions you take or the taxes you pay, you should talk to your tax advisor to see how it will affect your individual taxes.

Individual VS. Group Insurance

An individual long-term care insurance policy is a contract between you and the insurer. These policies must be approved by the California Department of Insurance (CDI) and have all of the consumer protections required under California law. Individual policies are "guaranteed renewable" and cannot be canceled by the insurance company unless the premium is not paid on time. However, every company has the right to increase the premiums it charges with proper notification and approval from the Department of Insurance.

Group long-term care insurance is a contract between an insurer and a group such as an employer on behalf of its employees or a trade or professional association on behalf of its members. If you are covered under a group plan, you receive a "certificate" rather than a "policy" of insurance. Also, many of the policy terms have already been negotiated by the group, and the group (called the "master policyholder") has the option to terminate the policy at any time. Often, but not always, group insurance is less expensive than individual insurance. If group coverage is terminated, you have the right to continue the coverage or buy a conversion policy depending on the provisions of the policy and other factors. If you purchase group coverage, ask about what options will be available to you if the group cancels the policy or if you lose your membership or eligibility.

Be sure to ask if the premiums will change and ask how you will be notified.

Note: If you are considering buying group insurance, investigate the sponsoring group. Be sure the group is negotiating in your interest. Some group policies do not need to be approved by the CDI although the company is required to send information about the policy to the CDI for its records. The master policy can be canceled by the carrier or the sponsoring group at its option.

What Services Do Insurance Companies Cover?

Insurance policies describe what they will cover, what kind of care they will cover, who can provide the care and conditions that need to be met before a company will pay/reimburse the cost of benefits. Described below are the services required in a long-term care insurance policy approved under current California law. Be aware however, that California law has changed many times over the years and that insurance policies sold in previous years may have different requirements than are shown here.

Facility Coverage:

In California, most skilled, intermediate and custodial care is received in nursing homes that are licensed as "skilled nursing facilities". All long-term care policies except Home Care Only cover this kind of care.

Policies sold after October 2001 (except Home Care Only policies) are required to include a benefit to cover care in an RCF/RCFE. Some insurance policies sold before October 2001 may also include this benefit. RCF/RCFEs are not nursing homes but living arrangements wherein a person can also receive personal care or supervision. Some RCF/RCFEs are large retirement homes while others are small group homes.

Home Care Coverage:

Every long-term care insurance policy called "Home Care Only" or "Comprehensive Long-Term Care" must include at least the following 6 Home Care benefits and other consumer protections which should make it easier to receive care at home.

1. Home Health Care is skilled nursing care or other professional services in your residence.
2. Adult Day Care is medical or social care in a daytime program in a licensed facility which provides personal care, supervision, protection and/or assistance with ADLs and taking medications.
3. Personal Care is assistance with any of the ADLs including Instrumental Activities of Daily Living (IADLs) such as using the telephone, managing medications, moving about outside, shopping for essentials, preparing meals, doing laundry and light housekeeping.
   1. Under California law, these services may be provided by a skilled or unskilled person as long as they are required in a Plan of Care developed by your doctor or a team of health care workers under medical direction.
4. Homemaker Services is assistance with activities or tasks necessary to or consistent with your ability to remain in your home.
5. Hospice Services are services in your residence designed to provide physical, emotional, social and spiritual support for you, your caregiver and your family when a terminal illness has been diagnosed. Some policies will pay or reimburse the cost for these services in an institutional setting as well.
   1. Under California law, hospice services (like Personal Care and Homemaker Services) may be provided by a skilled or unskilled person so long as they are required in a Plan of Care developed by your doctor or a team of health care workers under medical direction.
6.  Respite Care is short-term care provided in a nursing facility, in your home or in a community-based program which is designed to relieve the primary caregiver in your home.

When Will Long-Term Care Insurance Benefits Become Available?

The Benefit Triggers in a tax qualified long-term care insurance policy are:

Impairment in ADLs 

1. ADLs are used to measure your physical abilities to determine if you qualify for benefits.
2. The law requires tax-qualified policies to pay or reimburse benefits if you are impaired in two out of the following six ADLs: bathing, dressing, transferring, eating, toileting, and continence.
3. An "impairment" in ADLs means that you need "substantial assistance either in the form of hands-on assistance or standby assistance due to a loss of functional capacity to perform the activity".

Impairment of Cognitive Ability

1. An "impairment of cognitive ability" means you need "substantial supervision due to severe cognitive impairment".

Note: Some companies also offer a non tax qualified long-term care insurance policy. The non tax qualified policy will include ambulating as a seventh ADL.

Conditions to the Payment/Reimbursement of Benefits

You will need to meet certain "conditions" after the "benefit triggers" have been met before benefits will be available.

Plan of Care:

This is a plan written by your doctor or a medical team that establishes your need for care, describes the kind of care you need and the frequency of the required services. The Plan of Care is a familiar document to your doctor, hospital discharge planners, home health agencies and other health care providers who know about long-term care services. Many policies also require that the Plan of Care be updated periodically to reflect any change in your need for care.

Elimination Periods:

The elimination period (sometimes called a "Waiting Period" or "Deductible Period") is the period of time you must wait after you qualify for care and are eligible to receive benefits before the company will begin paying or reimbursing you for your covered care. You choose the length of the Elimination Period when you buy the policy. The most common options are 0 days, 30 days, 90 days or 100 days. Some policies only make you meet the Elimination Period once during the life of the policy; others apply it again after you have gone for a certain period of time without needing care. In some situations the elimination period will be satisfied by a day of either in-home care or institutional care. The premiums are usually higher for short elimination periods and lower for longer ones. Be sure to ask your long term care insurance agent to explain these very important differences.

• During the elimination or deductible period, you will be responsible for paying the full cost of your care. The claims process (or payment process) for covered costs begins once the elimination or deductible period is satisfied or on the first day if you select a zero day elimination period.
• If you qualify for benefits in a home care setting most long-term care insurance policies apply a day towards your Elimination Period for any day you actually receive care (or a home care visit). Therefore, if your plan of care only calls for 3 visits per week you will only satisfy 3 days towards your Elimination Period. Some companies offer a more liberal interpretation of this definition. For example, the policy might say that if you have one home care visit per calendar week that you've satisfied 7 days towards your Elimination Period. In this example, you would satisfy your Elimination Period more quickly.
• Companies may utilize a "calendar day" definition for the elimination period. Once the insured has been certified as being chronically ill, each calendar day counts towards the elimination period, regardless of whether formal long-term care services are received. This allows the insured person to get informal care from family or friends during the elimination period. After the elimination period has been satisfied, payment or reimbursement of benefits can begin.

The premium cost is usually higher if you choose the shorter Elimination Periods and is lower if you choose a longer period. In addition, a premium might be higher if the company uses a more liberal "counting" of home care Elimination Period days. Also, make sure that the Elimination Period days that are accumulated either in a home care or institutional care setting are combined to satisfy your overall elimination period. Be sure to ask your long term care insurance agent to explain this.

How Much Do Insurance Policies Pay / Reimburse for Long-Term Care?

The Daily Maximum:

It is important to understand the coverage provided and how benefits will be paid/reimbursed before you purchase a Long-Term Care Policy. If you decide to buy a long-term care insurance policy, you will select a maximum daily benefit. It is important to note that the minimum home care daily benefit you can select in California is $50 a day. There is no minimum daily benefit for facility care.

Selecting the Daily Maximum

Because you will be responsible for all expenses not paid or reimbursed by your insurance policy, you need to decide how much of the daily cost of care you may need to pay yourself. Estimate the daily cost of long-term care in your community and subtract the amount you can afford to pay for each day of your care.

To help the benefits of your policy keep up with the annual increase in the cost of care due to inflation, every insurer is required to offer you Inflation Protection.

The Maximum Lifetime Benefit

The approximate number of years you want the policy to provide benefits will determine the Maximum Lifetime Benefit. The longer the period of coverage, the higher the premium. Your Lifetime Maximum Benefit is computed by multiplying the Daily Maximum benefit you select by the approximate number of days you want benefits to be paid or reimbursed.

Selecting the Maximum Lifetime Benefit

No one can predict how many days or years of long-term care a person will need or the reason they will require care. Some people can afford lifetime coverage, others have so little money they would quickly qualify for Medi-Cal. Choosing the right amount of benefit depends on the premium you can afford, and the assets you would otherwise have to spend.

Are Long-Term Care Insurance Rates Regulated?

Policies currently available in California from insurers regulated by the CDI are subject to the "rate stabilization" law. This means that premium rates are subject to actuarial review by the Department and rate increases on these policies are subject to additional review and justification requirements.

Premium Discounts and Other Premium-Related Benefits:

Companies may offer discounts if both spouses or domestic partners purchase long-term care insurance and may provide discounts for those who do not use tobacco products and are healthy. The definition of spouse in California includes domestic partners in accordance with insurance code section 381.5. Companies may provide that the policy of the surviving spouse is "paid-up" when the first spouse dies - no further premium payments are required. The policy may also have a "Waiver of Premium" option that relieves the insured of paying the premiums while receiving benefits. Policies may offer rate guarantees for certain time periods for an additional premium. A qualified long term care insurance agent can assist you in reviewing the options available.

What is Inflation Protection?

Inflation Protection is intended to help maintain the value of the benefits you purchase today so they will keep up with future increases in the cost of care. In the past, long-term care costs in California have increased at an annual rate of more than 5%.

Protecting against the rising cost of care is one of the most important choices you will make. Inflation protection increases the Daily Maximum, the Maximum Lifetime Benefit and other benefit amounts. If you purchase individual long-term care insurance, your insurer must offer you at the time you purchase the policy the option to purchase an inflation protection feature. Your insurer must offer inflation protection which is no less favorable than the following options: (1) Increases benefit levels annually so that the increases are compounded annually at least 5%; or (2) a Benefit Increase Option.

1. Annual benefit increases.

The insurer is required by California law to offer you the option of a 5% annual compound inflation protection feature that automatically increases your previous year's Daily Maximum and Lifetime Maximum Benefit amounts by 5%. If you decide not to purchase the 5% compound annual inflation protection feature, you will be asked to sign a rejection of the offer. Also, if you do not purchase 5% compound inflation, some insurers may also offer you the option of a 5% (or other percentage) annual simple inflation protection that automatically increases each year the Daily and Lifetime Maximum Benefits by a fixed 5% of the amounts in your original policy. Policies with inflation protection cost considerably more initially since they automatically include the annual increases in benefits you need to keep pace with inflation.

While the premiums are designed to remain level, insurance companies may apply for rate increases that, if approved by the CDI, will increase your premium in the future. (Please refer to the "Are Long-Term Care Insurance Rates Regulated?" section of this guide.)

2. Benefit Increase Option.

This option allows you to pay an additional premium to increase the benefit coverage amounts at stated intervals during the life of the policy (may be referred to as guaranteed insurability or future purchase options). There are usually a limited number of increase options offered to you over the life of the policy. If you decide not to exercise this option one or more times when it is offered, you will lose any chances to increase your benefits in the future.

With the Benefit Increase Option, your premium will increase each time you choose to accept the insurer's offer to increase the coverage amounts. The premium increase for each benefit upgrade will be based on the amount of coverage added and your age at the time you exercise the Benefit Increase Option. Because rates for older individuals are significantly higher and you will be older when each upgrade is offered, each Benefit Increase Option you accept will result in a larger premium increase than the prior offers. The advantage of the Benefit Increase Option is that the initial premium you pay for the policy will be much lower than if you choose the Annual Benefit Increase Option. However, in the long run, you may end up paying more in total premiums to protect your benefits against inflation protection because of the additional premiums you must pay to purchase each Benefit Increase Option.

Your long term care insurance agent must show you an illustration of the effect of inflation on the cost of care and how the benefits of a policy with and without inflation protection compare to the cost of care over time. Before you make a decision, you might want to consult with a financial planner, an attorney, a HICAP counselor or a family member.

What Consumer Protections Apply to Long-Term Insurance Sold in California?

California has a long list of consumer protections some of which are listed here.

Renewability:

Every individual long-term care policy must be guaranteed renewable.

Guaranteed Renewable means that the insurer may not cancel your coverage unless you do not pay premiums on time. Your coverage may not be canceled because of your age or your health but the company retains the right to increase premiums if the CDI approves the increase.

Group Coverage Renewability:

If you purchase a long-term care certificate through a group, you have the right to either continuation or conversion if your coverage terminates.

Conversion means you will be issued an individual policy containing identical or equivalent coverage regardless of your health or your age. The premium will be calculated on your age at the time the group certificate was issued.

Duty of Honesty, Good Faith and Fair Dealing:

Every long-term care insurer and insurance agent owes every applicant and policyholder a duty of honesty, good faith and fair dealing. Among other things, this duty means that advertisements and other marketing materials may not be misleading.

Applicants must be given fair and accurate comparisons of policies. No excessive insurance or inappropriate replacement policies may be sold. High pressure tactics are expressly forbidden. Insurance agents must receive special training in order to sell tong-term care insurance.

30-Day Free Look:

Purchasers of individual long-term care insurance (except purchasers through employer groups or trade associations) have the right to review the policy or certificate for 30 days after they receive it. If they decide not to buy the insurance for any reason, they may return the policy to the insurer or the agent without explanation, and all the money they paid will be refunded to them. (Note: Keep a record of the date you receive the policy and the date you return it or return it by certified mail.)

Outline of Coverage:

An outline of coverage is a summary of the terms of a policy or certificate that you can use to compare different policies. An Outline of Coverage must be delivered to you at the time of an insurance agent's first presentation. If you are purchasing insurance through the mail, then the Outline of Coverage must be delivered to you at the time you receive the application or enrollment form. You do not need to fill out an application in order to get the Outline of Coverage. A long term care insurance agent or insurance company should be willing to give you an Outline of Coverage. You may also request a sample policy.

Changing Your Benefits:

If you find that you cannot afford to continue paying the same amount of premiums for the coverage you bought, you have the right to reduce your benefits in return for a lower premium. Companies must, at a minimum, let you reduce the daily benefit or change the number of years the company will pay benefits so the lower premium is an amount that is more affordable.

Checklist and Counseling Information:

Long term care insurance agents are required to leave a number of documents with you when they sell a long-term care insurance policy.

Among the items you should get is a copy of a "Personal Worksheet" that helps you understand some of the issues related to purchasing long-term care insurance and the name, address, and local phone number of the HICAP office nearest you where you can receive, free of charge, information and counseling about long-term care insurance.

Can I Afford Long-Term Care Insurance?

Remember that after retirement, income often does not keep pace with inflation. As you age you may have unexpected medical expenses such as prescription drugs or other medical costs that may not be covered by your medical insurance. The loss of a spouse can also result in reduced income. Select a premium you can comfortably afford. Take into consideration that your premium may increase during the years you own the policy. When talking to a long term care insurance agent about long-term care insurance, it is important for you and your agent to understand your financial circumstances so that he or she can tailor a plan best suited to your needs.

Should I Replace My Existing Policy with a Newer One?

The advantage of replacing an older policy is that newer policies may offer more desirable benefits and features and fewer restrictions. Assisted living in an RCF/RCFE, home care benefits, inflation protection and no requirement for a prior hospital stay are some of the benefits and features being offered in current long-term care products. However, just because a policy is newer does not necessarily mean it is better than the one you have. In some instances, your insurer may be required to offer you its newer policy but you may have to undergo new underwriting to obtain the new coverage.

One disadvantage to replacement is that the insurance company will charge higher premiums because you are older than you were when you bought your original policy. In addition, if you have any preexisting conditions or you are 80 years old or older, companies may refuse to issue new coverage. If you are still insurable, you might consider adding new coverage to the benefits you already have or buying an additional policy to supplement your existing benefits.

Before you add benefits to an existing older policy you should check with your long term care insurance agent, company or tax advisor to see if you will lose the grandfathered tax status granted policies purchased prior to January 1, 1997. Whenever you are considering replacing a policy, consulting a HICAP counselor is recommended.

Before Buying Individual Long-Term Care Insurance, What Questions Should I Ask?

• Has this company increased premiums on policies it has sold to other consumers in California or in other states? Study the personal worksheet or our website.
• How long has this company been selling long-term care insurance?
• What Nursing Homes, Residential Care Facilities/Residential Care Facilities for the Elderly and Home Care providers, are near my home and covered by the policy?
• What are my choices for: Daily Maximum, Lifetime Maximum, Elimination Period and Inflation Protection?
• If the policy requires an Elimination Period, do I have to meet it only once or more than once during my lifetime?
• May I hire anyone I choose to provide Personal Care and Homemaker Services under this policy? If not, what are the qualifications that care providers must meet? Policies approved for sale in California must cover independent providers for Personal Care and Homemaker Services.

If the policy waives the premium:

• How is it waived?
• Does the waiver apply to all the benefits or only to nursing home care?
• What happens to any premiums I have already paid?

How Do I Choose A Qualified Long-Term Care Insurance Agent?

Here are some important things to determine about your prospective agent.

A qualified long-term care insurance agent should be able to help you sort through the company and benefit choices. Much of the decision making process revolves around your age, health conditions and financial suitability. In order to assist the agent in finding the best long-term care insurance policy for your needs, you need to find a long term care insurance agent you can trust and have a candid conversation with him or her regarding all of these matters.

Make sure the agent is certified to sell long-term care insurance. This means that he or she has taken two 8-hour certification courses within the last 24 months. If the agent has been licensed for less than five years, he or she will have taken an 8-hour certification course every 12 months. Long term care insurance agents selling the California Partnership policies will have taken an additional 8 hours of training that allows them to be a full-service long-term care insurance agent in California. It is important to buy the best coverage that meets your needs and budget. Don't buy coverage you can't afford. Be sure to shop around, compare benefits and prices before you make a decision. Notice if the agent asks the right questions. Without knowing your financial circumstances and health status the agent cannot possibly provide you with the best choices. A competent long term care insurance agent should be able to show you what the premium would be from several companies for benefits that fit your needs and that you can afford.

A good long term care insurance agent will not just sell you a policy but will be there to help you when you have questions, need to make changes or have a claim. Make sure that the agent you are working with has a good history and track record in providing on-going services to his or her clients. Don't be shy about asking for references. You can also check out a long term care insurance agent by selecting the "Check License Status" link at the top of this page.

Before the agent leaves you should be provided with the following documents:

• Outline of coverage
• Personal Worksheet
• The Buyer's Guide "Taking Care of Tomorrow"
• The name, address and phone number of your local HICAP office

You should get these documents even if you don't agree to buy a policy that day.

Choosing An Insurance Company

An insurance company's financial standing and track record are important in choosing a long-term care insurance policy. Consumers should consider the rate increase data included in this rate guide along with several other important factors.

Financial Standing

A company's size and ratings are important factors to take into consideration when making your long-term care insurance choice.

Underwriting Philosophy

Don't be discouraged by a company that carefully evaluates your health. Long-term care insurance companies that use firm and consistent underwriting standards should, over the long run, have more stable premiums. This is because they are careful about the risks they accept and likely to have more predictable claims results. It is important that the company carefully reviews your health history, the results of your telephone interview and/or a face-to-face assessment and then makes an offer of insurance based on those results. "Easy-issue" offers mean that a company may be issuing insurance to people who already have serious health conditions and will definitely need long-term care. Such a practice can in turn lead to higher premiums for everyone who bought insurance from that company.

Group Self-Insured Plans

Long-term care insurance offered on a group basis which is self-insured does not necessarily have the same strict consumer protection provisions that apply to individual long-term care insurance. Work with a qualified long-term care insurance agent to determine your priorities so that you can make the best choice for your long-term care insurance needs.

You Get What You Pay For

If a policy looks too "cheap" it probably is. Long-term care insurance has many optional benefits and nuances. Work with a long term care insurance agent who asks good questions and works with your personal situation to design a benefit package that suits your needs.

Longevity in the Long-Term Care Insurance Business

Long-term care insurance is a relatively new product. While a handful of companies have been offering long-term care insurance for a decade or more, there are many companies that have recently entered the marketplace. Some companies have long experience with this type of insurance while others have less. Experience is just one more element to evaluate when purchasing this type of insurance.

Final Thoughts

The information in the Rate Guide can provide you with valuable insight if you decide to purchase a long term care insurance policy. No one element, however, should determine your choice. Try to view each element in perspective and balance them with your personal needs.