A Shopper’s Guide to Long-Term Care Insurance

(PDF version)

(February 2011)

Long-term care is a type of personal care you may need if you are unable to care for yourself because of a physical illness, a disability, or a cognitive impairment, such as Alzheimer’s disease.

Long-term care is different from traditional medical care that tries to treat or cure illnesses. Long-term care helps you keep your current lifestyle, but it may not improve or fix your medical problems. You can receive care at home or in a hospice, adult day care center, nursing home, or assisted living facility.

If you have an illness or disability, you may need assistance with your normal daily activities, such as eating or getting around. If you are cognitively impaired, you may need supervision, protection, or reminders to take medicines or perform other activities. Long-term care may also include services to evaluate your overall needs.

Types of Care

There are two types of long-term care services:

Skilled care is for conditions that require a medical professional, such as a nurse or a therapist. This type of care is usually provided in a nursing home or other care center.
Personal care (sometimes called custodial care) helps you carry out normal daily activities, like bathing, eating and moving around. Personal care is less involved than skilled care, and it may be provided in many places.

The Cost of Long-Term Care

Long-term care can be expensive. The cost depends on the amount and type of care you need, where you receive it, and what type of medical professional provides it. On average in Texas, it costs about:

$3,000 per month to live in an assisted living center
$190 per day for a private room in a nursing home
$40 a day for adult day care
$20 a day for a home health aide

A long-term care policy’s daily nursing home benefits may range from $50 to $250 per day. To find out how much coverage you might need, call local nursing homes, home health care agencies, and adult day care centers and ask about their cost for daily care. Keep in mind that costs will likely increase as you get older.

Paying for Long-Term Care

People pay for long-term care in a variety of ways, including:

Medicaid
Medicare
Long-term care insurance policy
With their own money

Medicaid pays most long-term care expenses for eligible individuals with low incomes. Medicaid is a state and federal assistance program.

To qualify for Medicaid, you must meet state and federal guidelines for income and assets. Many people pay for long-term care with their own money until they become eligible for Medicaid. To learn more about Medicaid eligibility, call your local Area Agency on Aging or Texas Health and Human Services Commission office. A list of phone numbers is included on the inside back cover of this publication.

Medicare may pay some long-term care costs. Medicare is a federal program that pays for health care for people over age 65 and for people under age 65 with disabilities. It covers the cost of some skilled care in nursing homes or possibly in your home. Medicare might also pay for some non-medical care in your home if you are receiving skilled care.

Deciding if Long-Term Care Insurance is Right for You

Long-term care insurance can help protect your assets against the high cost of extended long-term care. However, long-term care insurance usually only makes sense if you have significant assets to protect other than your home, car, and a small amount of cash.

Long-term care insurance is probably not a good idea if you have trouble stretching your income to pay for utilities, food, or medicine. If you don’t have significant assets, you may have to pay for your care out of pocket until you exhaust, or spend down, your assets enough to qualify for Medicaid.

To determine whether long-term care insurance is right for you, consider your personal risk factors, assets, income, costs, and available alternatives. You can also use the Long-Term Care Insurance Suitability Worksheet to help you decide.

Agents are required to provide you with a worksheet and list of things you should know before you buy to help you decide if long-term care insurance is right for you.

Personal ‘Risk Factors’

The following factors might affect your likelihood of needing long-term care:

Life expectancy. The longer you live, the more likely it is that you will need long-term care. Consider whether your family has a tendency for long life expectancy.
Gender. Women may need long-term care insurance more than men because they generally live longer.
Your family situation. If you have a spouse, adult children, or other family members who can care for you at home, you might not need some types of long-term care services.
Family health history. You may have a greater need for long-term care if chronic or debilitating health conditions run in your family.

Financial Considerations

Long-term care is typically less expensive if you purchase it when you’re younger. You may want to seek help from a trusted financial advisor to decide if it meets your needs. Consider the following questions about your personal financial situation:

What are my assets (not including my home, car, and $2,000 cash)? Will they change over the next 10 to 20 years? Are my assets large enough to justify the expense of a long-term care policy?
What is my current annual income? Will it change over the next 10 to 20 years? Will I be able to afford the policy if my income decreases or if the policy premiums increase significantly?
If I retire, how will retirement affect my ability to pay premiums?
How much does the policy cost? Will I pay the premiums from my income, savings, or investments? Will my family contribute toward the cost?
Will I be able to pay for charges in excess of the policy’s daily benefit amounts and for other expenses if I’m in a long-term care facility for an extended time?
When should I consider purchasing a policy?
How much will the policy premium increase if I wait to purchase a policy?

If you decide you want to buy a policy, use the Long-Term Care Insurance Policy Comparison Worksheet to compare companies and coverages before you purchase a policy. Also view the list of companies offering long-term care policies in Texas.

Qualified and Non-Tax Qualified Policies

Tax-Qualified Policies

You may be able to deduct part of the premium you pay for a tax-qualified long-term care policy from your taxes as a medical expense. In addition, you are generally not required to claim your qualified long-term care policy benefits as taxable income. However, in the case of an indemnity policy, you might have to pay taxes on any benefits the policy pays above costs that pay for care.

All policies sold before January 1, 1997, are automatically tax-qualified and policies sold later are either tax-qualified or non-tax-qualified. To determine whether your policy is tax-qualified, look for a statement on your policy similar to this: “This policy is intended to be a qualified long-term care insurance contract as defined by the Internal Revenue Code of 1986, Section 7702B(b).”

Consult with an attorney, accountant, or tax advisor about how purchasing a long-term care insurance policy will affect your taxes.

To claim a tax deduction for long-term care premium payments, your out-of-pocket medical expenses, including premiums, must be more than 7.5 percent of your adjusted gross income. The maximum amount of long-term care premium you can deduct depends on your age at the end of each tax year.

Maximum Long-Term Care Premium Deductions, 2011*

Age	Maximum Allowable Deduction
40 or younger	$340
41 to 50	$640
51 to 60	$1,270
61 to 70	$3,390
71 or older	$4,240

* Maximum deduction amounts change annually.

Texas Long-Term Care Partnership Program Policies

Texas implemented the Long-Term Care Partnership Program to educate Texans about planning for their long-term care needs. The partnership is a joint effort between private insurers and the state. Insurers must follow state and federal guidelines and agents must complete training to sell partnership policies.

Partnership policies have an asset disregard benefit that is useful if you need to apply for Medicaid assistance to pay for long-term care expenses. Partnership policies, however, do not guarantee you’ll be accepted into Medicaid. You’ll still have to meet income, medical, and other eligibility criteria.

With the asset disregard benefit, every dollar of long-term care benefits your partnership policy pays will equal one dollar of countable assets that will be disregarded to determine if you’re eligible for Medicaid assistance. This means you can retain assets above the normal limit and you won’t need to spend down your assets to qualify for Medicaid. In addition, the assets that were disregarded in the Medicaid eligibility process will not be subject to Medicaid liens and recoveries after you die.

In addition to asset disregard, long-term care partnership policies must also include the following benefits:

Inflation protection. Inflation protection helps your policy continue to pay long-term care benefits as costs rise. Partnership policies provide different levels of inflation protection based on your age:
Under 61 years old: The insurer is required to offer you the option to purchase 5 percent compound annual inflation protection. You can choose to purchase protection at a lower rate, but you must have some type of compound inflation protection. Upon attaining 61 years of age, you can change the inflation protection provision to meet the requirements of the next age bracket.
Ages 61 to 76: You must purchase and keep some form of inflation protection until you are 76 years old.
After age 76: Insurers must offer inflation protection, but you don’t have to purchase or keep it.

If you’re considering a long-term care policy, ask your insurance company or agent if a partnership policy meets your needs. If you purchased a long-term care policy on or after February 8, 2006, ask your agent about exchanging your policy for a partnership policy.

Note: Partnership policies will come with a disclosure statement identifying the policy as a long-term care partnership policy. Be aware that if you make any changes to your partnership policy, you could lose your partnership policy status. Your agent can tell you what changes will result in a status change.

Moving to another state

Texas participates in a national reciprocity agreement with other states to honor the terms of your partnership policy. If you move to a state that participates in the reciprocity agreement, the new state will honor your partnership policy. Be careful basing your decision to purchase a partnership policy on reciprocity with other states because states can start or stop the reciprocity agreement at any time. For a list of participating states, visit www.OwnYourFutureTexas.org. If you move to another state, you will also need to meet all the Medicaid requirements for your new state of residence.

List of companies selling partnership program policies in Texas

Non-Tax-Qualified Policies

Premiums for non-tax-qualified long-term care policies are not tax deductible. In addition, you might have to pay taxes on any benefits the policy pays above costs that pay for care.

Qualifying to Purchase Coverage

Companies selling long-term care insurance underwrite their coverage. That means they look at your health status and history and will sell you a policy only if you meet their guidelines.
Some companies ask only a few questions about your health. Others may ask for more details, examine your medical records, ask for a health statement from your doctor, or require you to take a medical exam. Answer all health questions truthfully and thoroughly. If a company later learns you gave incomplete or false information on your application, it could cancel your policy or refuse to pay your claim.

When you apply for insurance, the insurance agent will complete a personal worksheet with you to determine if a long-term care policy is right for you. Answer all questions truthfully and thoroughly. The agent will also give you the company’s long-term care premium rate increase history for the past 10 years. An insurance company can increase your premium rates in the future, but only if it increases the rates for policies similar to yours.

Replacing a Policy

If you’re considering replacing a long-term care policy, compare all of your current policy’s benefits to any new policy you are considering. Policies issued prior to 1992 might have fewer or more restricted benefits than a newer policy.

Remember that a new policy with better benefits may cost significantly more than your current policy. In addition, if you bought your current policy before January 1, 1997, it is tax qualified. A new policy might not be.

Make sure you tell the agent if you’re buying a long-term care policy to replace another one. The agent must provide you with a notice explaining how replacing the policy will affect you.
If you decide to replace your policy, don’t cancel your current policy until the new one is in effect.

Ways to Buy Long-Term Care Insurance

You can buy an individual policy, or you can buy a group policy through an employer or through membership in an association. Some companies also offer life insurance policies or annuities with long-term care insurance as a rider.

Individual Policies

Most long-term care insurance policies are sold to individuals. Individual policies can be very different from one company to the next. Each company may offer policies with different combinations of benefits. Be sure to shop around to get the coverage that best fits your needs.

Group Policies

Your employer may offer a group long-term care insurance plan or offer individual policies at a group discount.

An employer’s group policy may be similar to what you could buy with an individual policy. An advantage of a group policy for employees is that you may not have to meet any medical requirements or there may be a relaxed screening process. Many employers also let retirees, spouses, parents, and parents-in-law apply for this coverage. Relatives must usually pass the company’s medical screening to qualify for coverage and must pay the premium.

Generally, insurance companies must let you keep your coverage after your employment ends or your employer cancels the group plan. In most cases, you will be able to continue your coverage or convert it to another long-term care insurance policy. Your premiums and benefits may change, however.

Federal and State Government Policies

Federal and U.S. Postal Service employees, retirees, and qualified relatives are eligible to apply for long-term care insurance coverage through the Federal Long Term Care Insurance Program. Private insurance companies underwrite the insurance, and the federal government does not pay any of the premiums. The group rates under this program may be lower than individual rates and the benefits may also be different.

If you or a family member is a state or public employee or retiree, you may be able to buy long-term care insurance under a state government program.

Association Policies

Many associations offer long-term care insurance to their members. Like other group policies, association policies usually give their members a choice of benefit options. In most cases, policies sold through associations must let members keep or convert their coverage after leaving the association. Most association policies will require you to go through the underwriting process to obtain coverage. Be careful about joining an association for the sole purpose of buying insurance coverage. Review your rights if the policy is terminated or canceled.

How Policies Work

Long-term care insurance policies are not standardized. Companies sell policies that combine benefits and coverage in different ways.

Benefit Criteria

Policies have different benefit eligibility criteria (also called triggers) that you must meet before the company will pay benefits. These are based on how many of the six activities of daily (ADLs) you cannot perform or whether you have a cognitive impairment. The six ADLs are bathing, eating, dressing, using the bathroom, continence, and moving from a bed or chair.

Tax-qualified policies require that you be unable to perform two of the six ADLs without substantial assistance for at least 90 days or have a cognitive impairment, such as Alzheimer’s. You must also have a plan of care prescribed by a doctor.

Non tax-qualified policies may offer a different combination of benefit eligibility criteria but most are based on ADLs and cognitive impairment. Criteria are not restricted to two ADLs. Medical necessity or other measures of disability can be offered as benefit criteria.

Elimination Period

The elimination period is the amount of time you have to wait before a policy will pay any benefits. The most common options are for benefits to start at zero, 20, 30, 60, 90, or 100 days after you enter a nursing home or start receiving other services. Benefits begin on the day after your elimination period ends. You can lower your premium by choosing a longer elimination period. However, keep in mind that you’ll have to pay all your expenses out of pocket for a longer time before the policy will pay.

Some policies have only one elimination period, while others require an elimination period for each new period of care. Be sure to check how the elimination period works before buying a policy.

Benefit Period

A benefit period is the amount of time a policy will pay benefits. Benefit periods may range from a minimum of one year to a lifetime. The most commonly offered benefit periods are one, two, three, or five years, or for a lifetime. The premiums for longer benefit periods are higher.
Some companies provide a maximum benefit as a total dollar amount rather than an amount of time. For example, if you buy a policy with a lifetime benefit of $73,000, the policy would pay for each day of care until you reach the maximum benefit. If the current charge were $200 per day, the benefit would last for one year.

How Benefits Are Paid

Insurance companies that sell long-term care insurance generally pay benefits using one of two different methods: the expense-incurred method or the indemnity method. It is important to read the literature that accompanies your policy and compare the benefits and premiums.

Policies using the expense-incurred method only pay benefits when you receive an eligible service. The company will pay the benefit amount – either the cost of the expense or the dollar limit of your policy, whichever is less -- to you or your provider. Most policies today pay benefits using the expense-incurred method.

Policies using the indemnity method pay a set dollar amount up to the limit of the policy regardless of the cost of the service you receive.

For tax qualified policies that pay benefits using the indemnity method, benefits that you receive in excess of the costs of long-term care services may be taxable.

Services Covered by Long-Term Care Insurance

Long-term care insurance policies may pay for several types of care, including:

Nursing home care in a licensed nursing home.
Assisted living care in a licensed assisted living home.
Home health care services that may include skilled nursing care and physical therapy. A licensed home health agency generally must provide this care.
Adult day care in a licensed center. Typical benefits include nursing or therapeutic care, social and educational activities, or personal supervision.
Other services. Some policies will pay for hospice care, respite care (care to allow family members who are caregivers to have time off), care after a hospital stay, help with household chores, or caregiver training for family members.

You might not need a policy that includes all of the above services. Talk to your agent to design a policy that meets your needs.

Coverage Amounts

A policy may pay different amounts for different types of long-term care services. Be sure you understand how much coverage you will have and how it will cover long-term care services you receive.

Daily, Weekly, and Monthly Benefit Limits

Policies normally pay benefits by the day, week, or month. For example, a policy that pays with the expense-incurred method might pay a daily nursing home benefit of up to $200 per day or $6,000 per month, and a weekly home care benefit of up to $1,400 per week.

When you buy a policy, insurance companies let you choose a benefit amount for care in a nursing home. If a policy covers home care, the benefit is usually a portion of the benefit for nursing home care (for example, 50 percent or 75 percent of your daily nursing home benefit). However, a growing number of policies pay the same benefit amounts for care at home and in a facility.

You can often select the home care benefit amount that you prefer. It is important to know how much skilled nursing homes, assisted living homes, and home health care agencies charge for their services before you choose the benefit amounts. Check prices at centers in the area you’re likely to receive care.

Maximum Benefit Limit

Most policies limit the total benefit they will pay over the life of the policy. Some policies state the maximum benefit limit in years (one, two, three, or more, or lifetime). Others policies list the maximum benefit limit as a total dollar amount. The maximum benefit limit may be called a total lifetime benefit, a maximum lifetime benefit, or a total plan benefit.

Most nursing home stays are short, but illnesses that last several years could mean longer nursing home stays. You will have to decide if you want protection for long stays. Policies with longer maximum benefit periods cost more. Make sure you understand the total amount of coverage provided by your policy.

Services Not Covered by Long-Term Care Insurance

Long-term care policies may exclude coverage for some conditions, either completely or for a limited time. Policies typically exclude:

Preexisting conditions. A preexisting condition is an illness or disability for which you received medical advice or treatment in the six months prior to applying for long-term care coverage. A long-term care policy can delay coverage of a preexisting condition for up to six months after the policy’s effective date.
Mental and nervous disorders. A long-term care policy can exclude coverage of some mental and nervous disorders, but the policy must cover Alzheimer’s disease and other age-related disorders. (However, a company can deny to sell a policy to a person already suffering from Alzheimer’s.) A long-term care policy must also cover all serious biologically based mental illnesses and brain diseases, such as schizophrenia or major depressive disorders.
Care by family members. Most policies will not pay members of your family to take care of you. However, some policies will pay to train family members to be caregivers.

Standard Policy Exclusions

Texas long-term care policies may exclude coverage for conditions resulting from

alcoholism and drug addiction
suicide, attempted suicide, or self-inflicted injuries
participation in a riot, felony, or insurrection
war or an act of war, whether declared or undeclared
service in the armed forces
aviation activities, if you were not a fare-paying passenger.

In addition, long-term care policies won’t pay for care Medicare already pays for (with the exception of expenses that Medicare pays as a secondary payer) or any other government program, except Medicaid.

Long term care policies may not provide benefits for services or items paid for by another long-term care or health insurance policy. The insurance company cannot deny a claim because services were provided outside the state you were issued the policy.

Optional Features

Companies must offer inflation protection and a nonforfeiture benefit. The benefits are usually available for an additional premium.

Inflation Protection

It may be years before you actually need long-term care services. During that time, long-term care costs could increase significantly. Inflation protection helps you keep up with increasing cost of services between the time you bought your policy and the time you actually need them.

The younger you are, the more important inflation protection may be. The amount of additional cost for inflation protection primarily depends on how old you are when you buy the policy.

Be careful not to give up necessary benefits in the future for a lower premium today. If you buy a partnership policy and are under 76 years old, you must purchase and maintain inflation protection to ensure you won’t lose your policy’s partnership status.

Policies must offer inflation protection in at least one of the following ways:

Benefits automatically increase by 5 percent or more each year, compounded annually.
Your original benefit amount increases by 5 percent or more compounded each year on the policy’s renewal date. If you don’t want the increase, you must reject it in writing within 30 days after the policy renewal date.
The policy covers a specified percentage of actual or reasonable charges for as long as you own it, with no maximum daily limit or policy limit.

The company must give you a graphic comparison of benefits on a policy with and without inflation protection over a 20-year period. If you don’t want inflation protection, you must reject it in writing.

Nonforfeiture Benefit

Companies must offer you a guarantee that you will receive some of the benefits you paid for even if you later cancel or lose coverage. This guarantee is called a nonforfeiture benefit. In most cases, the longer you pay premiums on the policy, the larger the nonforfeiture benefit will be.

Generally, a nonforfeiture benefit will either pay up to the total amount of all premiums paid or 30 times the daily nursing home benefit at the time the policy lapsed, whichever is greater.

A nonforfeiture benefit can significantly increase a policy’s premium. If you decide not to buy a nonforfeiture benefit, you must reject the offer in writing and the company must explain its contingent nonforfeiture benefit.

The company will offer a contingent nonforfeiture benefit if your premium is raised substantially as defined in the policy. The benefit allows you to either choose a reduced benefit amount to prevent premium increases or to convert your policy to a paid-up status. If no election is made within 120 days of the due date of the premium increase, the election can be changed to a paid-up status. The paid-up status will be the greater of either the total sum of all premiums paid for your policy or 30 times the daily nursing home benefit at the time the policy lapsed.

Individuals who purchase limited premium payment policies that are paid in full within a certain time are also entitled to a contingent nonforfeiture benefit during the payment years with different qualifying conditions. Talk to your agent about these conditions.

In addition, you’ll receive an explanation of the nonforfeiture and contingent nonforfeiture benefit upon lapse. You can buy a nonforfeiture benefit for an additional premium that will guarantee that you will receive some of the benefits you paid for if you cancel or lose coverage. Read the Optional Features section for more information about nonforfeiture and the contingent nonforfeiture benefit.

Optional Benefits Companies May Offer

Waiver of Premium

Many policies include a waiver of premium provision. This provision allows you to stop paying premiums when you are in a nursing home and the insurance company has started to pay benefits. Companies may waive the premium as soon as they make the first benefit payment or after a specified time, usually 60 to 90 days after the first payment. This provision may not apply if you are receiving certain benefits (home health care or adult day care, for instance).

Refund of Premium

The company will refund some or all of your premiums – minus any claims paid under the policy – if you cancel the policy. Your beneficiary will receive the refund if you die. Usually, you must have paid premiums for a certain number of years before this benefit becomes effective. If you keep the policy, the company will use the refund of premiums to make future premiums cheaper or to increase future benefits.

Restoration of Benefits

Some policies restore benefits to the original maximum amounts if you don’t need long-term care services for a specified period, usually 180 days. For example, assume your policy has a maximum benefit period of three years and you were in a nursing home for a year. If you do not require additional long-term care services for at least six months after leaving the nursing home, your benefit period would automatically be restored to the original three years.

Bed Reservation

If you must leave a nursing home to go into a hospital, some policies will pay to reserve your bed in the nursing home for a specified number of days or until you return.

Long-Term Care Rates

Insurance companies determine long-term care premiums based on several factors. Some of these include:

Age. The younger you are, the lower your premium will be.
Your health. Your health at the time the policy is issued will affect your premium. Your premium will be higher if you have health problems.
Elimination period. The longer you can pay your expenses before the company begins paying benefits, the lower your premium.
Benefit amount and duration. Rates are higher for policies with higher benefit amounts and longer payment durations.
Other factors. Long-term care costs may vary greatly from one area to another. Where you live will affect the cost of your coverage. Optional benefits you decide to add to your policy also will increase your premiums.

Premium Increases

Premiums on most long-term care policies will increase over time. Companies can raise the premiums on policies that don’t have fixed rates, but only if they increase the premiums for everyone with similar rates in your rate class. A company cannot single you out for a rate increase, regardless of any change in your health or the number or amount of claims you’ve made. The company can base your rate class on your age, where you live, and your health status at the time you purchased your policy. The company must give you at least 45 days notice of any premium increase.

View TDI's Long-Term Insurance Care Rate Guide to view rates for companies selling long-term care insurance.

Policy Renewals and Cancellations

Long-term care policies are guaranteed renewable. This means the company must renew your policy each year unless you lied about your health in the application, didn’t pay your premiums, or used all your benefits.

You can cancel your policy at any time by giving notice to the insurance company. The company must return any unearned premium to you. Unearned premium does not apply to a single premium policy or to policies that will be paid in full in one to four years. Policies that will be paid in full in five to 10 years are subject to a return of premium as described in the policy.

After a policy has been in force for two years, a company cannot cancel it or refuse to pay claims because you lied on the application, unless the lies are fraudulent. If a policy has been in force less than two years, a company can deny a valid claim or cancel the policy if it can prove you lied or tried to deceive it.

When you buy a long-term care policy, the company will ask you to choose another person who will also receive notice if your policy is about to be canceled because you have not paid the premium. The other person can be a relative, friend, or a professional, such as your lawyer or accountant. Although the company is required to ask, you do not have to designate anyone to receive this notice. The designated person will not be responsible for paying the premium and will only be notified if the payment is more than 30 days past due.

A company may not cancel a policy for nonpayment of premium unless the premium has gone unpaid for at least 65 days past the due date. The company must wait 30 days after the due date before notifying you and any person you designated that it will cancel the policy for nonpayment. Once the company has mailed the notice, it must allow five days for you to receive it. From that date, the company must give you 30 days to pay the premium.

You may want to consider paying your long-term care policy premiums by automatic bank draft. However, you’ll have to notify the company and the bank in writing to stop the withdrawals if you no longer want the policy or you want to change the method of payment.

If the company cancels your policy for nonpayment, it must reinstate the policy upon receiving proof within approximately five months of the cancellation date that you failed to pay premiums because of mental or physical impairment. The company must also pay any claims for eligible services. You will have to pay back premium to the date the policy lapsed.

Alternatives to Long-Term Care Insurance

Here are some other methods to help you pay for long-term care services in lieu of long-term care insurance:

Life Insurance

One option for funding long-term care is through life insurance. Some companies offer an accelerated benefits rider for an additional premium that allows you to access your death benefit early if you are diagnosed with a long-term, catastrophic, or terminal illness. The amount you withdraw to pay for long-term care will be subtracted from the death benefit that will go to your beneficiaries when you die.

There are also some life insurance policies that offer long-term care insurance as a rider. If your policy includes any of these options, you may be able to pay for long-term care with the proceeds.

Annuity Contracts

Some annuity contracts allow you to withdraw money without a penalty to pay for long-term care services. If your contract includes this option, you may be able to pay for long-term care expenses with your annuity

Viatical and Life Settlements

Some companies purchase life insurance policies and pay a percentage of the policy’s death benefit in return. If you are terminally ill and have a life expectancy of two years or less, it’s called a viatical settlement. If you no longer want or need your policy, it’s called a life settlement.

If you sell your policy, the buyer becomes the policy owner, pays the premiums, and collects the policy’s benefit upon your death. Make sure you check with your insurance company about any cash value you may have in your policy to determine if the cash value is more beneficial to you than selling the policy.

To get a list of registered viatical or life settlement companies and brokers, call the Texas Department of Insurance (TDI) Consumer Help Line or visit our website

1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov

Reverse Mortgages

If you own a home, you may be able to get a reverse mortgage. Reverse mortgages are special home loans available to people 62 and over. They allow you to convert part of the equity you’ve built up in your home into income without having to sell the home or take out a second mortgage. No payments are due on the loan until the borrowers no longer use the home as the primary residence. Some people use income from a reverse mortgage to pay for long-term care expenses.

Helpful Telephone Numbers and Websites

“Own Your Future” Texas Long-Term Care Insurance Partnership Program (state initiative to increase awareness of the importance of long-term care planning)

www.ownyourfuturetexas.org

“Own Your Future” National Clearinghouse for Long-Term Care Information (U.S. Department of Health and Human Services)

1-202-619-0724
www.longtermcare.gov/

Medicare (questions about Medicare coverage, long-term care planning tools, and nursing home finder comparison tool)

1-800-Medicare (1-800-633-4227)
www.medicare.gov

Medicare and TrailBlazer Health Enterprises (questions about Medicare Part A and Part B coverage or claims and requests for Medicare participating provider directory)

1-800-Medicare (1-800-633-4227)
www.trailblazerhealth.com/

Social Security Administration Toll-free Hot Line (questions about Medicare enrollment and eligibility and requests for the Medicare and You handbook)

1-800-772-1213
www.ssa.gov

Texas Department of Aging and Disability Services Information and Referral Hot Line (statewide services for seniors and locations of Area Agency on Aging offices)

1-800-252-9240
www.dads.state.tx.us/

Texas Department of State Health Services (questions about health facility compliance and licensure)

1-888-963-7111
www.dshs.state.tx.us

Health and Human Services Commission’s Medicaid Hot Line (questions about Medicaid coverage)

1-800-252-8263
2-1-1 (free information about resources in your area)
www.dads.state.tx.us/ltss/ (Medicaid Long-term Care Services website)

Texas Medical Board’s Customer Service Hot Line (questions about licensing and certification of doctors and complaints about care provided in a doctor’s office)

1-800-248-4062
www.tmb.state.tx.us/

Texas Medical Foundation Health Quality Institute Beneficiary Help Line (questions or complaints about quality of care provided to Medicare beneficiaries and requests for publications)

1-800-725-8315
www.peoplewithmedicare.org/

For More Information or Assistance

For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line between 8 a.m. and 5 p.m., Central time, Monday-Friday, or visit our website

1-800-252-3439
463-6515 in Austin
www.tdi.texas.gov

You can also visit HelpInsure.com to help you shop for automobile, homeowners, condo, and renters insurance, and TexasHealthOptions.com to learn more about health care coverage and your options.

For printed copies of consumer publications, call the 24-hour Publications Order Line

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Help us prevent insurance fraud. To report suspected fraud, call our toll-free Fraud Hot Line

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To report suspected arson or suspicious activity involving fires, call the State Fire Marshal’s 24-hour Arson Hot Line

1-877-4FIRE45 (434-7345)

The information in this publication is current as of the revision date. Changes in laws and agency administrative rules made after the revision date may affect the content. View current information on our website. TDI distributes this publication for educational purposes only. This publication is not an endorsement by TDI of any service, product, or company.

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