The situation

Paul, age 66, and Mary, age 65, jointly applied for a hybrid long-term care insurance policy. Unfortunately, Paul was declined because of existing health issues. Paul was concerned that his future care needs would be a physical and emotional burden for Mary. He knew that home care assistance to help Mary would be costly and would significantly impact their retirement savings and lifestyle. The hourly cost of home care in his area is $24.00 and projected to be $43.00 if he needed care at age 86.

The solution

Paul immediately qualified for a short-term care insurance policy. There was no requirement for a medical exam or records. He simply answered “no” to the questions of currently receiving care benefits, and currently receiving care assistance.

The cost / benefit

The policy covers home care. Paul would be reimbursed up to $300 daily for a maximum of 360 days for home health care (skilled) and up to $80 daily for a maximum of 60 days for home aide care (personal). There are zero elimination days. Home health care benefits restore for the maximum period one-time if not needed and interrupted for 180 days. Paul will be reimbursed for up to $600 per year for prescription drugs.

Paul’s policy costs $47.41 a month. The premium will step up in cost at ages 71, 76, 81 and 86.

The value 

Mary needs assistance caring for Paul at his age 86.

Paul will have paid $$19,978 in insurance premiums. 1
Paul will have received $12,600 in prescription drug reimbursements. 2
The net cost of the policy will have been $7,378. 3

Paul receives $108,000 in home health care (skilled) reimbursements. 4
Paul receives $4,800 in home aide care (personal) reimbursements. 5
Paul’s total care benefits are $112,800. 6

  1. $19,978 = ($47.41 x 12 months x 5 years) + ($63.53 x 12 months x 5 years) + ($85.131 x 12 months x 5 years) + ($114.07 x 12 months x 6 years) in insurance premiums.
  2. $12,600 = $600 x 21 years in prescription drug reimbursements.
  3. $7,378 = $19,978 – $12,600. 4. $108,000 = $300 x 360 days.
  4. $4,800 = $80 x 60 days. 6. $112,800 = $108,000 – $4,800.


Long term care insurance advisors and Investments in Tucson AZ, Bill Counts,