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At Fleming Financial Services, Inc., our role is to assist our clients in defining and realizing their financial objectives and goals. We work with our clients to implement personalized plans designed for their unique situations. Our areas of concentration are: Retirement planning, Estate and Wealth Transfer strategies, and Business Continuation planning. We emphasize the importance of conducting our business with integrity and professionalism. As a member of PartnersFinancial, an independent national financial services company, we are able to provide access to sophisticated resources for the benefit of our clients. Some of the professionals with our firm are currently registered to conduct business through NFP Securities, Inc. With those additional resources in place, we help facilitate the complex corporate and personal financial decisions our clients must make.
Today’s Long-term Care Coverage: The Fine Print - Part 2
Long- Term CareAlthough at first glance these two rider options seem relatively similar, there are some key differences and important details that advisors and clients must be aware of before choosing one of these LTC solutions. Qualifying Length of Chronic Illness With an LTC rider, the qualifying condition may be fully recoverable; it does not have to be considered a permanent chronic illness. Examples of a recoverable condition are a mild stroke, knee surgery, hip replacement and back surgery.  Overall, these are temporarily disabling conditions that would lead an insured to be unable to perform at least two ADLs (such as bathing, eating, transferring), but over time would heal, allowing the insured to return to their normal activities and lifestyle. With an Accelerated Death Benefit for Chronic Illness rider, it is generally required that a physician certify the chronic illness as permanent, meaning that it is a non-recoverable condition that will more than likely last for the rest of the insured’s life. It is very important that clients understand this difference, as aforementioned guidelines for the Accelerated Death Benefit for Chronic Illness rider may be a limitation that some clients are not comfortable with. Covered Benefits/Expenses Both LTC and Accelerated Death Benefit for Chronic Illness riders have limitations on what is considered covered or qualified care. To accelerate the death benefit, the client must first qualify for the benefits by meeting the aforementioned definition of chronic illness (two ADLs or severe cognitive impairment). And in most cases, there must be documented evidence of the insured’s illness or impairment, and a detailed description of any care and services received by the insured (e.g., medical records, service providers’ notes on care, itemized bills). Most insurers also require a “Plan of Care,” a written plan for services designed specifically for the insured. The plan must specify the type, frequency and providers of all the services the insured requires and be approved by a licensed health care practitioner. Once these requirements are met and the elimination period satisfied, the rider benefits are available to the client to help cover the costs of qualified care. Most insurers have specific guidelines as to what they consider qualified care. These generally include:
  • Nursing home care
  • Home health care
  • Adult day care
  • Respite care
  • Hospice care and other qualified long-term care facilities
Qualified care generally also includes expenses related to room and board at any one of these facilities. However, there is no standard across the industry of what an insurer must consider qualified care, and each insurer may have varying stipulations to these general guidelines. For example, one insurer may cover home health care provided by a family member of the insured, while another may require that home health care be provided by a licensed health care practitioner, such as a registered nurse employed by a licensed home health care agency. With an indemnity plan, the insured has more flexibility with the rider proceeds after they qualify for the benefits. Excess funds not needed for qualified care can be used to cover other expenses, such as physician charges, hospital and laboratory charges, prescription and non-prescription medicine, medical supplies, medical equipment, transportation, home improvements to help the insured with their disabilities and limitations (e.g., wheel chair accessibility) and any other incurred expenses. With the reimbursement plan, the insured will only be reimbursed for the actual charges they receive for qualified care provided by an approved facility or provider. Insurers typically also have specific exclusions for which they will not provide benefits, such as: care for intentionally self-inflicted injury, care required as a result of alcoholism or drug abuse, care due to war injuries and care required as a result of an insured’s participation in a crime. Insurers will also typically not provide a benefit if there has been a “duplication of benefits,” which occurs when expenses are covered under other plans, such as certain government programs, workers’ compensation, employer’s liability, another LTC insurance policy or a health insurance policy.   Copyright © 2013 NFP. All rights reserved.      
Thomas Joseph
Other articles by: Thomas Joseph
Categories: Fleming Financial Services, Fleming Financial, Retirement Solutions, Long-term Care
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