The relationship between LTC Insurance and Lifecare
A lifecare contract is one of several types of residency contracts offered by continuing care retirement Communities, also referred to as CCRCs or life plan communities. Such a contract is similar to long-term care insurance (LTCI) in the sense that a resident is buying a contract that limits the out-of-pocket cost for long-term care services that may be required in the future.
So, if you are considering a lifecare contract should you maintain your LTCI? Since there may be an overlap in coverage between your LTCI policy and the lifecare contract, here are some things to consider:
What does your LTCI cover?
Does your LTCI policy reimburse for the cost of care, or does it pay a flat, monthly amount, regardless of the actual cost of care? The latter type of policy (flat, monthly amount) could be particularly beneficial if you choose to reside in a lifecare community. In fact, if your monthly coverage amount is higher than your monthly service fee at the lifecare community you could come out ahead once you begin receiving benefits, meaning that your policy coverage amount may be more than your monthly rate at the lifecare community.
If your policy is a reimbursement policy you should talk with a knowledgeable representative at the community to find out what portion of your monthly service fee would be considered a refundable expense for long-term care insurance. You should also talk with a representative at the insurance company to find out exactly how CCRC are classified for purposes of your coverage and to be sure that care provided in a CCRC, either in your independent living unit or in the healthcare services, is a reimbursable expense.
If you purchased your policy 20+ years ago, it may be limited to "nursing home" coverage (services provided in a skilled nursing facility), and will not cover in-home services or care in an assisted-living facility. In this case, only services in the skilled-care facility within the lifecare community would be covered. Also, find out if your policy provides coverage for care that you might receive in your home. Lifecare contracts include services received in the healthcare facility but not the cost for outside providers that you hire to deliver services in your independent living residence. In this case a long-term care insurance policy can still be quite valuable.
Finally, if unforeseen circumstances cause you to leave a lifecare community it could prove wise to maintain your coverage in case you move someplace that does not offer a lifecare contract. Rather than dropping your coverage altogether after moving into a lifecare community you may want to consider contacting your insurance company about trimming your benefits and premium to more closely match your current needs without losing your coverage altogether. Be sure to ask Royal Oaks more about this subject when you visit. Schedule a tour! 623-815-4132.
The above article was written by Brad Breeding of myLifeSite and is legally licensed for use.