Coordinating Long Term Care Insurance with expected Veterans’ Benefits

Today’s blog post continues the series about buying long term care insurance as a strategy for planning ahead for long term care.  My post of May 22, 2014 discussed whether to buy long term care insurance at all.  My post of May 29, 2014 suggested looking for a stable, proven insurer.  My post of June 5, 2014 described how to identify a proven, stable Long Term Care insurance company.  My post of June 12, 2014 discussed the importance of protection against inflation. My post of June 19, 2014 suggested planning to use insurance to pay for four or five years of long term care.  My post of June 22, 2014 suggested a daily rate to choose when purchasing long term care insurance.  My post of July 10, 2014 advised to look carefully at the list of Activities of Daily Living that can trigger coverage from the long term care insurance policy.  My post of July 17, 2014 described the differences between a “period of time” kind of coverage and a “pile of money” kind of coverage.  My post of July 25, 2014 advised to make sure that the long term care insurance includes coverage for cognitive impairment.  My post of July 30, 2014 described the differences between tax-qualified and non-qualified policies.  My post of August 5, 2014 discussed the value of long term care insurance policies that qualify for the Partnership program.    My post of August 14, 2014 discussed hybrid policies that combine long term care insurance with life insurance.  My post of August 21, 2014 described how a long term care insurance policy with a return of premium rider can be used to construct a “hybrid” life insurance/long term care insurance policy.  My post of August 28, 2014 described how to use a partnership policy to protect just enough of your life savings while holding down the cost of the insurance.  The introductory post in the series on planning ahead for long term care costs appeared on May 15, 2014.

Today’s post discusses how to coordinate Long Term Care Insurance with expected benefits through the Veterans Administration.

The U.S. Department of Veterans Affairs (still generally called the VA) has some programs that help pay long term care costs for veterans.  Veterans who need long term care because of some medical condition that is attributable to their time in the service can get disability payments through the Compensation program.  Veterans and their spouses who cannot get out of their homes because of a medical condition that is not related back to their service can get Housebound pension.  Veterans and their spouses who need help with their Activities of Daily Living (dressing, eating, toileting, grooming, bathing, etc.) can get Aid & Attendance pension.

The amount of money available to veterans through these programs varies with the level of disability of the veteran (for disability claims,) the medical costs of the veteran and/or spouse, and inflation.

None of these programs will pay the full cost of long term care.  They might pay a significant portion of such costs, though.  Accordingly, a veteran  (or spouse) considering a purchase of long term care insurance should consider whether to buy less insurance because these programs are available.

For example, a veteran and spouse today (2014) can get up to $2,085 per month through the Aid & Attendance pension to help pay for otherwise unreimbursed medical expenses.  If the veteran and spouse had long term care insurance that covered all of their expenses, the $2,085 would not be “unreimbursed,” so the Aid & Attendance benefit would not be available to them.  The trick would have been, years ago when the veteran and spouse bought long term care insurance, to buy just enough insurance to cover their expenses while still getting full use of the Aid & Attendance benefit.  Their insurance premiums would have been lower because the daily rate they would have bought would have been lower

A veteran and spouse (if the veteran is married) looking at long term care insurance today must consider how high a daily rate to buy and how much they wish to count on veterans benefits in the future.  The veteran or couple must make their best guess at how much the veterans benefits will make available to them at the time they need long term care.  In fact, the veteran or couple must decide whether they believe these benefits will be available at all in the future.

For more information, visit Jim’s website.

Jim Koewler’s mission is
“Protecting Seniors and People with Special Needs.”

For help with long term care or with planning for someone with special needs,
call Jim, or contact him through his website.

© 2014 The Koewler Law Firm.  All rights reserved.

Comments are closed.