LTCi policies became popular with employers and individuals in the early ‘90s and ‘00s. However, because these plans were relatively new, insurance companies based their pricing on assumptions that were either incorrect or on historical claims data that was not fully developed.  In addition, no one predicted the 2008 financial crisis which lowered federal interest rates and put further pressure on insurance companies to raise rates.

Since then insurance companies revised their pricing assumptions to reflect:

• Higher-than-expected claims incidence, largely due to no medical underwriting;
• Longer life expectancy due to medical advances;
• Lower-than-expected policy termination rates; and
• Perhaps most importantly, adjusting to the low interest rate environment by reducing their interest rates assumptions from 6-8% to 2-3%.

As a result of these factors, many insurance companies (including CNA) are no longer selling long term care insurance and if they are, they do not offer LTCi with guaranteed approval.

Today’s long term care insurance products are priced much more accurately and have considered the issues of the past.  A recent Society of Actuaries study showed the likelihood of today’s products ever needing a rate increase is 10% and if there was a rate increase needed the average increase would be 10%.

The CNA policies do not have built-in automatic inflation protection. In the future, you will receive offers from CNA approximately every three years to purchase additional coverage to keep up with the rising cost of care. These Future Purchase Offers (FPO) will be priced based on your current age at that time (your attained age), so the cost will be more expensive each time an offer is made.

No. Most states offer Partnership programs for LTCi policies that must fit within specific guidelines regulated by each state. Partnership programs provide extra asset protection when qualifying for Medicaid if you have used up your LTCi benefits but still need additional long term care. The current CNA policies DO NOT qualify for state Partnership programs.

The CNA program is closed to new entrants. Coverage for spouses & domestic partners is not available under the old CNA program. If you want to cover your spouse\partner you can buy a policy from one of the approved insurance companies offered to Wells Fargo Team Members.

This is not a simple “yes or no” question given several factors that could come into play including:

• Has my medical status changed since I first purchased my LTCi policy?
• Have my or my family’s needs changed since I first purchased my policy?
• Are you concerned about your current carrier’s financial viability and/or their commitment to the long term care marketplace?
• Given the increasing cost of extended care services, does my policy include the correct level of benefits and most up-to-date plan provisions (such as inflation protection)?

For help evaluating your options, please speak with our LTC Specialists to review your policy and options. Under no circumstances should you cancel your current CNA policy before being formally approved for a new policy.

We have a team of licensed LTC specialists available to help educate you on the program, answer questions, provide proposals and complete applications over the phone.  The specialists average 10+ years in the long term care planning industry and are experts in this field.  Long term care planning is unique, there isn’t a one size fits all plan and the plans vary widely in their cost and benefits. Their goal is to educate you on the issues and options available so you can make the best decision for you and your family.

Compound Inflation: The cost of long term care services is likely to be higher years down the road when you need it most. An optional inflation protection rider allows policy benefits to increase to assist with potential rising costs. Here’s how it works:

• The current maximum monthly benefit and remaining policy limit increase annually by the percentage the insured selects
• The increase occurs on each policy anniversary date for the life of the policy
• Lifetime compound inflation options available – 1%, 2%, 3%, 4% and 5%

Most people understand life insurance. You buy a set amount; say $250,000, and when you die that money is paid to whomever you chose – the beneficiary.  Long term care is similar in that you choose the total amount, say $100,000, and it pays when you need help with everyday activities.  Instead of paying $100,000 at once, it pays over time up to the monthly benefit you choose.

Long term care insurance has 2 critical components: Monthly Benefit and Benefit Pool.

• Monthly Benefit: The maximum amount of money paid monthly to cover the cost of care.  If the cost of care is less than your monthly benefit then that money stays in your benefit pool to be used in the future.  If the cost is more than your monthly benefit, you or your family will need to cover the difference.
• Benefit Pool: The maximum amount of money your policy will pay out. Your benefits will continue as long there is money left in the benefit pool.

The national average cost of care varies by the type of care you are looking at. For example, the national average cost of care for home health care is $61,936 a year; while around the clock care in a nursing home averages $113,530 a year.¹

The costs vary significantly based on what state and region you live in.  The cost of care for a nursing home in North Carolina is around $107,784 a year, while the cost in Kansas is over 24% more at about $86,760 a year.

The top three locations to receive long term care are in your own home (home health care), in an assisted living facility, or in a nursing home. Additional options may be available in your area such as respite care and adult day care centers.

How or where you or a loved one receives care can vary in cost.

As you can see, home health care offers the flexibility to receive care in your home, but you may pay more for it than assisted living (depending on the level of care needed).

¹ Based on 2022 Cost of Care Survey by Mutual of Omaha.  Home Health Aide and Private Room in a Nursing Home Care Facility.

The short answer is yes, but not easily and only in certain circumstances.

Long Term Care insurance is designed, reviewed and regulated to never require a rate increase once it is inforce.  However, the law allows insurers to request rate increases if deemed necessary.  These increases can only be on a group of people, based upon the product they purchased.  The rate increase request is reviewed by each state’s Department of Insurance who has the authority to decide if a rate increase is granted, and if so, how much increase is allowed.

Rates cannot be increased for reasons like:

• Increasing age
• Gender
• Health condition(s)
• Filing a claim
• You individually

Insurance companies go through a process of analyzing current claims data, future claims data, interest rates, future risks and many other factors before requesting rate increases. Rate increases cannot be applied to any specific age, gender, health condition, or demographic; they are approved based on policy (product) statistics only.

Insurance companies must get approval from each state’s Department of Insurance (DOI) prior to any increase going into effect.

Carriers propose the percentage of increase they would like to implement and the state approves it ‘as is’ or requires modification.

Because of this involvement by state departments, the state where you purchased the policy determines the percent of increase that your policy could incur. Companies request rate increases for a variety of reasons. The most notable reasons are:

• the increasing cost of long term care services
• increasing claims (people using LTCI)
• a low interest rate environment
• people staying on claim for longer than expected

Rate increases are necessary to help stabilize the market. It may be tempting to cancel your policy or stop paying premiums if you receive a rate increase, but it is usually much more expensive to buy the same plan you have on the current market and at your older age.

The good news is, even if your state does approve a rate increase, you may not have to pay more to keep your policy. Some carriers allow you to lower your inflation protection, daily benefit, or benefit duration to keep your plan within your budget.

Rates are fixed at the age that you buy the policy. The only way the cost can increase is if your state approves a rate increase on all Mutual of Omaha policyholders for that product and then you can choose to accept the rate increase or lower your benefits to maintain the original cost.

The best time to buy any insurance is the day before you need it, but no one knows when that will be. The average age of team members that buy coverage at work is 49.  The average age of individuals that buy a policy is age 56.  The cost goes up as you age and start increasing significantly each year in your 60’s and 70’s.  Also consider your health: as we age we often develop chronic conditions and those can make you uninsurable.

Couples get an additional 25% discount.  Shared Care combines both individual’s policies into one larger pool of benefits.  For example, if a husband and wife each have a $100,000 benefit pool, together they have $200,000 of benefits that each can pull from.  So, if one spouse suddenly passes away, the entire $200,000 is still available for the surviving spouse to use and the surviving spouse only pays for their own policy.  Shared Care requires full underwriting for both employees and spouse/partners.

If you can no longer afford the cost of your current premium our first recommendation would be to reduce coverage rather then cancel the policy. To reduce your policy benefits, please contact Mutual of Omaha at 877.894.2478, they can go over plan design options for you within a more affordable price range.

If you do choose to cancel the policy, there is one simple form that we recommend sending to the carrier. To cancel your policy, contact Mutual of Omaha at 877.894.2478. Once the policy is cancelled, you will lose any premiums and benefits acquired up to that point. (We highly recommend not cancelling the policy).

Absolutely! This policy is 100% portable to you whether you move to another state, retire or leave your current employer.

If you stop paying premiums, because the rates have increased and are no longer affordable, your policy will lapse. Letters will be sent to you, and anyone listed on your application as a protection against lapse contact, in an attempt to keep the policy inforce. If attempts are made and premium is still not received, the policy will lapse. In some circumstances you can keep LTC benefits in the amount of premiums paid. For example, if you paid $10,000 in premiums over the life of the policy you MAY be able to keep $10,000 in LTC benefits.

The likelihood of this is small unless you buy a small policy or have a very long claim like Alzheimer’s. Once the entire Lifetime Maximum Benefits are paid the policy terminates since it has paid out.

Shared Care is an optional policy benefit many couples include when they apply together and have identical benefits.  This feature combines the couple’s Benefit Pools into one large pool of money that either partner can use. Here’s an example: A couple buys a policy that provides $100,000 of total benefits to each person.  With this optional feature the insurance company combines both of their $100,000 of benefits into a combined $200,000 that both can use.  If one partner dies then the remaining $200,000 is left for the surviving partner to use.  It is a great cost effective way to leverage a couple’s policy.

Long Term Care policies have a Lifetime Maximum Benefit. Your benefits will last as long as there is money left on that Lifetime Maximum Benefit.  For example, if you had a Lifetime Maximum Benefit of $150,000 then your benefits will last until $150,000 in benefits have been paid as long as premiums are paid.

Unfortunately, there is not a time where the policy would be ‘paid up’.

This is the standard level of underwriting that most people go through. You will be asked to give your medical history for the past 3-5 years, including any medical conditions, surgeries, and tests you have had.  This includes the contact information for all physicians and specialists you have seen and all current and past medications you have been prescribed.

Phone Interview

Once the insurance company receives your application they, or one of their vendors, will contact you to schedule a time to review your application.  This call generally lasts 15-20 minutes but can be longer depending on your age or if more information is needed.  Due to privacy requirements the caller will not have a copy of your application, so they may ask you some of the same questions you answered on the application.

Here are tips to help make the call go faster.

1. Schedule at your earliest convenience, allow 30 minutes in case it goes longer, and plan for a time when you can give it your full attention.
2. Have medication names and dosages, and contact information for the physicians you have seen in the last 3 years.

Medical Records

A report will be pulled of all the prescription drugs you have been prescribed currently and over the past 3 years.  Mutual of Omaha will also contact the doctors and specialists you have seen in the last 3 years to request your medical records for cause or if you are over the age of 60.  To speed up the process, please call your doctors and let them know you applied for this insurance and ask that they promptly reply to the company’s requests.  Some physicians and clinics require a special authorization to be signed before they will release the records.  If this is the case the insurance company will contact you to obtain this.

Face to Face Interview

Rarely, but depending on your age or medical conditions, you may be required to complete an in-person interview with a nurse. This is usually performed at your home and lasts 40-60 minutes.  The nurse will take your height and weight, blood pressure, review medical history, and perform a standard memory test. To protect your privacy, the nurse will not have a copy of your application.  Therefore, expect to repeat some information you’ve already provided.

The approval process is normally 4-6 weeks; however, it could be longer if your doctors are slow to respond or if you have a face to face interview.

If your application is approved, you will receive the policy and a letter from Mutual of Omaha in the mail.  If you applied with your spouse/domestic partner you will not receive your policy until a decision is made on both you and your spouse’s/domestic partner’s applications.

If your application is not approved, you will receive a letter by mail explaining the insurance company’s decision and the reason they reached that decision.

Yes, but only if you pay with your Health Savings Account (HSA), which is pre-taxed.

Your policy is effective the day you sign your application, assuming your policy is approved.