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A Consumer’s Guide to....
LONG-TERM CARE INSURANCE
A Publication of The Maine Bureau of Insurance
GENERAL BROCHURE INFORMATION
This booklet is designed to help consumers compare some of the policies that insurance companies offer to Maine residents. Eligibility for coverage, the type of benefits offered, and the cost of premiums vary among these companies. Companies also offer more plan than those shown in the comparison chart. Please use this brochure only as a guide.
WHAT IS LONG-TERM CARE INSURANCE?
- Long-term care insurance provides at least twelve consecutive months of coverage for health services received in a place other than an acute care unit of a hospital or similar facility. The services are given to patients who suffer from chronic physical or cognitive impairment.
- A long-term care policy pays for necessary expenses incurred in nursing, assisted living and retirement homes, community settings such as adult day care centers, in the insured’s own residence, and in hospices. Benefits are available to pay for services received from skilled, intermediate, and custodial caregivers. For benefits to be paid, the services received must be given under a doctor’s written plan of care.
SOME DEFINITIONS:
The following are some terms that are commonly used in long-term care policies:
Elimination Period:
The number of days of care that you receive and must pay out-of-pocket before the insurance company begins to pay.
Benefit Period:
How long your benefits will last. These are usually stated
in terms of a maximum number of days, months, or years, or for home
health care, a maximum number of visits.
Pre-Existing Conditions:
A pre-existing condition is a health problem you may have or already have had when you apply for a policy. A pre-existing condition is defined as a condition for which medical advice or treatment was recommended by or received by you within 6 months before the effective date of your coverage. A policy may not exclude coverage for a loss or confinement that is the result of a pre-existing condition unless the loss or confinement begins within 6 months following the effective date of your coverage.
Home Health Care:
Services received in your home that may include skilled nursing care, speech, respiratory, physical or occupational therapy, or home health aide services. Assistance with personal hygiene, dressing or feeding may also be included.
Adult Day Care:
Provides supervision for insureds during the day when family members are not at home.
Assisted Living Facilities:
Provide ongoing care and related services to support those needs resulting from a person’s inability to perform activities of daily living.
Respite Care:
Includes services that can give family members a rest or vacation from their care giving responsibilities. It can be provided in a variety of settings including an individual’s home or a nursing home.
Hospice Care:
A program of care and treatment either in a hospice care facility or in the home for persons who are terminally ill and have a life expectancy of six months or less.
MEDICAL UNDERWRITING:
Individual long-term care insurance is medically underwritten. This means the insurance company can refuse your application for a policy if you do not meet its guidelines.
BACIS BENEFITS:
The basic benefits consist of reimbursement of covered expenses, after
you satisfy the elimination period up to the maximum amounts provided
by the policy. The overall maximum reimbursement may be a dollar amount
such as $120,000 or a formula amount such as $200 per day for up to
600 days of nursing home benefit. There is also a maximum daily limit
for the other benefits in the policy. Typically, the nursing home benefit
is the maximum daily benefit, such as $200, and care provided at home
or in an assisted living facility may be some percentage of the maximum
daily benefit, like 50%. If the daily reimbursements of the policy are
less than the maximum daily benefit, the benefits under a typical long
term care policy are extended until the overall maximum is reached.
Often, a portion of the overall maximum benefit may be reinstated if you recover for a specified period of time.
OTHER BENEFITS:
Several options are usually available that provide protection from future increases in long term care costs. You may not need long term care until many years after the policy is first issued. From the time you first buy the policy until you actually need to use the benefits, the cost of care is likely to increase. Maine law requires insurers to offer you an option to increase the amount of benefits in your policy to take into account the growing cost of care. These options come in a number of forms and are usually available only when the policy is initially purchased. These options increase the overall and daily maximums in the policy as follows:
- An automatic built in percentage increase each year with no change in premium. This increase may occur even if you are disabled. The cost of this option increases the premium a great deal.
- An automatic offer to increase benefits each year at the then current price for the increase in benefit, subject to you periodically using this option. The cost of this option causes premium increases in future years when you choose it.
- An increase in the benefit that occurs only while you are disabled. This option is usually associated with one of the other two options previously mentioned.
These options may be called different names like guaranteed insurability, cost of living coverage, inflation protection, etc.
When you first buy your policy, you must be offered the opportunity to include a surrender benefit (sometimes called a nonforfeiture benefit). The nonforfeiture benefit gives you a benefit at a later date if you decide that you no longer want to continue the policy by paying the premium. This benefit may be cash or some form of limited long term care benefit and usually increases with the length of time that the policy is in force. The cost of this benefit can be very expensive.
If you don't accept the offer of a nonforfeiture benefit when you first buy the policy, a company is required to provide a "contingent benefit upon lapse." This means that when your premiums increase to a certain level (based on a table of increases), the "contingent benefit upon lapse" will take effect. For example, if you're 70 years old and have not accepted the insurance company's offer of a nonforfeiture benefit, when the premium rises to 50% more than the original premium, you will be offered the opportunity to accept one of the "contingent benefits upon lapse." The benefits offered are: 1) a reduction in the benefits provided by the current policy so that premium costs stay the same; or 2) a conversion of the policy to paid-up status with a shorter benefit period. You may also choose to keep your policy and continue to pay the higher premium.
PREMIUMS:
- Once you are issued an individual policy, the policy is renewable as long as premiums continue to be paid. If premiums are not paid, the insurer can terminate the policy subject to any nonforfeiture benefit that the policy may have.
- Premiums are lower the younger you are when the policy is issued.
- Although the policy is guaranteed to be renewable, that does not stop the premium from increasing. However, increases in premiums are allowed only for the entire "class" of persons with the same coverage and only with the prior approval of the Maine Superintendent of Insurance. For example, the premium may be increased for all insureds who have the same policy and who have reached their 68th birthday. Premium increases are based on an increase in the company's claims experience as insureds grow older. The insurer may not raise you premium based only on your claims.
- The insurer may offer a premium discount if you and your spouse are covered.
- Some companies offer several options regarding how long the premiums
are payable. The typical premium paying period is over your lifetime.
However, for those young enough, the premium paying period may be
reduced so that payments are limited to 10 years or to age 65. These
limited payment options come with a steep increase in annual premium.
However, they could save money over the long term, especially if there
are future rate increases that affect premiums that would have been
paid after the reduced premium paying period.
- Rate increases have become more common on long term care policies primarily because companies introduced this product when there was no reliable data on which to base their rates and their assumptions were too optimistic. These premium increases have been significant in some instances. Although the insurers' data has been developed and the revised legal requirements encourage adequate rates, the potential for rate increases is still there. Before a company issues a policy, Maine law requires long-term care insurers to give you information on how often and by how much they have increased premiums in the past. Having this information may help you to determine the likelihood of future premium increases from this company.
- Some policies offer an additional benefit if your spouse is covered. For instance, the coverage on a surviving spouse may be extended after the first death.
OUTLINE of COVERAGE:
Before you apply for a policy, you must receive a summary of coverage. To make shopping for a policy easier, the insurer must give you an "Outline of Coverage" when the insurer, either directly or through a producer, first approaches you to buy a long term care policy. In addition to summarizing the product, the Outline of Coverage, must tell you that you may contact the Bureau of Insurance for help to understand the policies you are interested in buying.
WHAT IF I CHANGE MY MIND ABOUT BUYING THE POLICY?
30 DAY "FREE LOOK":
For the first 30 days after buying a policy, you may return it without cost. If you are not satisfied with the policy for any reason, you can return it to the insurance company and receive a full refund of any premium paid.
POTENTIAL STATE INCOME TAX BENEFITS:
The amount of money you pay for premiums may be deducted on your Maine income tax return (as well as your federal return). To be eligible to use premiums as a health care expense, your policy must qualify for income tax incentives under Maine law. The policy should have wording that says whether it qualifies under the tax law. If you are not sure about possible deductibility, your agent should be able to help you.
INFORMATION ON THE PREMIUM COMPARISON CHART
Since the benefits in long-term care policies are not all the same, choosing a policy can be very difficult. The following comparison chart is an attempt to simplify comparing policies. You should use the chart only as a guide. The chart does not list all the policies sold by the named carriers, but instead describes only one policy from each company. New policies and new options are always becoming available. Companies also offer different premium discounts that are not shown in the chart.
Please note: The premium comparison chart
in this booklet is not intended to be an endorsement of any of the listed
policies or companies. This brochure is intended to be used as a tool
to help you to become aware of some of the companies who offer
long term care policies in Maine as well as to show some sample policy
premiums.
Some companies who sell policies in Maine may not be included
in the chart as they did not respond to our request for information
or they had a policy approved after this booklet was prepared for printing.
If an insurance company or policy you are considering is not shown in the chart,
you can call the Bureau’s Consumer Health Care Division for additional
information at (207) 624-8475 or toll-free in Maine at: 1-800-300-5000.
You may also contact the Bureau of Insurance at these same numbers for
any other insurance-related questions you may have.
To help you to compare premiums (unless otherwise noted) the policies in the chart:
- pay a maximum benefit of $200 a day for long-term care
services;
- have a maximum lifetime benefit period as close as possible to five years; and
- have elimination periods (waiting periods) as close as possible to 90 days.
Premiums shown are current rates based on your age when the
policy is issued. The premiums shown in the chart are for policies that
are issued at ages 65 and 75, and are the annual premiums. (Insurers
may allow premiums to be paid on other than an annual basis.)
The actual premium that you will pay for a long-term care policy depends on:
- your age when the policy is issued;
- the maximum daily benefit that you choose;
- the maximum lifetime benefit period that you select;
- the length of the elimination period in the policy; and
- any optional benefits you choose to add to your policy.
LONG-TERM CARE INSURANCE POLICIES
Some policies that are available....
The following comparison information shows the different available
benefit periods (how long your benefits will last) and the different
available elimination periods (the amount of time you have to wait before
benefits are paid) that each company offers in their long term care
policies. To make premium comparisons as close as possible, companies
were asked to quote rates as close as possible to a 5 year benefit period
a 90 day elimination period, and a $200 a day benefit.
Not all companies that sell long-term care policies in Maine are
included in this chart. Companies enter and leave the market frequently.
Consequently, by the time this booklet is published, it may not show
an accurate reflection of all the companies who sell policies.
Many companies may also have more than one policy available or
may offer additional benefits. Due to space constraints, we are unable
to list more than one policy. Consequently, you may want to contact
the company or a licensed agent for more information on what is available.
SOME of the AVAILABLE LONG-TERM CARE INSURANCE POLICIES
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BENEFIT PERIOD AND ELIMINATION PERIOD USED FOR PREMIUM COMPARISON |
PREMIUM |
| COMPANY |
AVAILABLE
BENEFIT PERIODS |
AVAILABLE
ELIMINATION PERIODS |
BENEFIT PERIOD |
ELIMINATION PERIOD |
ISSUE AGE 65 $200 A DAY BENEFIT
1ST YEAR PREMIUM |
ISSUE AGE 75 $200 A DAY BENEFIT
1ST YEAR PREMIUM |
| Allianz Insurance Co. of No. America |
2, 3, 4, 5, 8 Years or Lifetime |
7, 30, 60, 90, 180, or 365 Days |
5 Years |
90 Days |
$2,320.00 |
$6,560.00 |
| American Network Insurance Co. |
2, 3, 4, 5, 6, 7, 8, 9, 10 Years or Unlimited |
0, 20, 30, 60, 90, 100, 120, 150, 180, 365, 730, 1095 or 1460 Days |
5 Years |
90 Days |
$2,576.00 |
$7,213.00 |
| Bankers Life & Casualty GRN520 |
730, 1095, 1460, 1825, 2190, 2920 Days or Unlimited |
0, 30, 90, or 180 Days |
1,825 Days - Policy pays up to a maximum dollar amount |
90 days |
$2,486.00 |
$6,270.00 |
| Berkshire Life Insurance Company of America |
3, 4, 5 Years or Lifetime |
0, 30, 90, or 180 Days |
5 Years |
90 Days |
$2,256.64 |
$6,166.40 |
| Combined Insurance Co. of America |
800, 1200, 1600 Days or Lifetime |
30, 60, 90, or 180 Days |
1600 Days |
90 Days |
$2,600.00 |
$7,340.00 |
| Genworth Financial Life Insurance Co. (7044ME) |
2, 3, 4, 5, 6, 8, 10 Years or Lifetime |
30, 90, or 180 Days |
5 Years |
90 Days |
$3,540.00 |
$10,380.00 |
| Great American Life Insurance Company |
365, 550, 730, 915, 1095, 1280, 1460, 1645, 1825, 2190, 2555, 2920 Days or Unlimited |
0, 30, 60, 100, 180, or 365 Days |
5 Years |
100 Days |
$1,654.66 |
$4,357.70 |
| John Hancock Life Insurance Company |
3,or 5 Years or 5 Years plus $1M |
100 Days |
5 Years |
100 Days |
$2,700.00 |
$7,640.00 |
| Massachusetts Mutual Life Insurance Co. |
3, 4, 5, 6,10 Years or Lifetime |
0, 30, 90, or 180 Days |
5 Years |
90 Days |
$2,103.75 |
$5,737.50 |
| Medamerica Insurance Co. |
2, 3, 4, 5, 7 Years or Lifetime |
30, 60, 90, or 180 Days |
5 Years |
90 Days |
$1,995.00 |
$6,255.00 |
| MetLife |
2, 3, 4, 5, 7 Years or Unlimited |
20, 45, or 100 Days |
5 Years |
100 Days |
$2,607.20 (with 50% home care) |
$7,481.80 (with 50% home care) |
| Minnesota Life Insurance Co. |
2, 3, 5, Years or Lifetime |
0, 30, 90, or 180 Days |
5 Years |
90 Days |
$2,287.85 |
$6,404.58 |
| Mutual of Omaha |
2, 3, 4, 5 Years or Unlimited |
0, 30, 60, 90, 180, or 365 Days |
5 Years |
90 Days |
$2,282.08 |
$7,928.80 |
| New York Life Insurance Co. |
2, 3, 4, 5, 7, 10 Years or Unlimited |
20, 90, 180, or 365 Days |
5 Years |
90 Days |
$2,530.00
(with 100% home care) |
$6,631.92
(with 100% home care) |
| Northwestern Long Term Care Insurance Company |
3 or 6 Years or Lifetime |
45, 90, or 180 Days |
6 Years |
90 Days |
$2,656.00 |
$7,158.00 |
| Physicians Mutual |
1, 2, 3, 4, 5, 8 Years or Lifetime |
0, 15, 30, 60, 90, 180, or 365 Days |
5 Years |
90 Days |
$2,467.95 |
$7,049.37 |
| Provident Life Insurance Co. |
2, 3, 4, 5, 6 Years or Lifetime |
20, 30, 60, 90, 180, 365, or 730 Days |
5 Years |
90 Days |
$2,324.20 |
$6,276.00 |
| Prudential Insurance Company of America |
2, 3, 4, 5, 6, 10 Years or Unlimited |
30, 60, 90, 120, 180, or 365 Days |
5 Years |
90 Days |
$2,551.40 |
$7,562.00 |
| State Farm Mutual Automobile Insurance Co. |
2, 3, 5, 10 Years or Lifetime |
30, 90, or 180 Days |
5 Years |
90 Days |
$2,822.00 |
$8,344.00 |
| State Life Insurance Co. |
2, 3, 4, 5, 6, 10 Years or Lifetime |
0, 30, 90 or 180 Days |
5 Years |
90 Days |
$1,995.00 |
$5,871.00 |
| United of Omaha Life Insurance Company |
2, 3, 4, 5, 6, 8 Years or Unlimited |
0, 30, 60, 90, 180, or 365 Days |
5 Years |
90 Days |
$2,604.58 |
$7,692.14 |
The following are telephone numbers
for the companies listed in this brochure. These are numbers that the
Bureau has on file as consumer information lines. While we have tried
to make this information as accurate as possible, we have found that
these company numbers change without notice.
| ALLIANZ LIFE INSURANCE CO. OF NORTH AMERICA - Minneapolis, MN |
(800) 729-8505 |
| AMERICAN NETWORK INSURANCE COMPANY - Allentown, PA |
(800) 222-3469 |
| BANKERS LIFE & CASUALTY - Chicago, IL |
(800) 231-9150 |
| BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA - Woodland Hills, CA |
(800) 819-2468 |
| COMBINED INSURANCE COMPANY OF AMERICA - Chicago, IL |
(800) 999-2170 |
| GENWORTH FINANCIAL - Richmond, VA |
|
| GREAT AMERICAN LIFE INSURANCE COMPANY - Austin, TX |
(866) 830-0607 |
| JOHN HANCOCK LIFE INSURANCE COMPANY - Boston, MA |
(800) 377-3711 |
| MASSACHUSETTS MUTUAL LIFE INS CO. - Woodland Hills, CA |
(800) 272-2216 |
| MEDAMERICA - Rochester, NY |
(800) 544-0327 |
| METLIFE - Bridgewater, NJ |
(888) 565-3761 |
| MINNESOTA LIFE INSURANCE COMPANY - Woodland Hills, CA |
(888) 505-9817 |
| MUTUAL OF OMAHA - Omaha, NE |
(800) 775-6000 |
| NEW YORK LIFE INS. CO. - New York, NY |
(800) 224-4582 |
| NORTHWESTERN LONG TERM CARE INSURANCE COMPANY - Milwaukee, WI |
(800) 890-6704 |
| PHYSICIANS MUTUAL - Omaha, NE |
(800) 720-2891 |
| PROVIDENT LIFE INSURANCE CO. - Chattanooga, TN & Portland, ME |
(800) 262-0018
or
(207) 761-3991 |
| PRUDENTIAL INSURANCE COMPANY OF AMERICA - Livingston, NJ |
(800) 732-0416 |
| STATE FARM MUTUAL AUTOMOBILE INSURANCE CO. - Bloomington, IL |
Contact a local
State Farm Agent |
| STATE LIFE INSURANCE COMPANY - Indianapolis, IN |
(800) 428-2316 |
| UNITED OF OMAHA LIFE INSURANCE COMPANY - Omaha, NE |
(800) 775-6000 |
Our Mission
The Bureau of Insurance, within the Department of Professional
and Financial Regulation, regulates the insurance industry for solvency
and consumer protection. It does so through its examining and licensing
procedures of insurance companies, by licensing producers, by reviewing
rates and coverage forms, conducting audits, and by sponsoring programs
that enhance awareness of and compliance with State laws. The Bureau
has statutory authority to enforce the State's laws and rules pertaining
to insurance, and it initiates investigations and holds hearings concerning
possible infractions of them.
Mila Kofman
Superintendent
Published by:
The Maine Bureau of Insurance
34 State House Station
Augusta, ME 04333
(207) 624-8475 or
in Maine (800) 300-5000
Printed Under Appropriation #01402A3041
September 2006
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Last Updated:
July 16, 2008
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