When you are considering long-term care insurance, or LTC insurance, there are many things to consider as you try to choose the best policy to match with your personal circumstances.
First of all, you should begin considering coverage at the earliest possible age. Most LTC providers only underwrite people who are between the ages of 40 and 80 and who don’t already have impairment to their ability to perform at least five of the six basic Activities of Daily Living, or ADLs. So if you are at least 40 and healthy right now, the time is now to consider buying LTC insurance, as the younger you are when you take out a given policy the greater your amount of options and the lower your premiums.
If you are now considering LTC insurance, it’s important for you to know the features and benefits you want to possibly pay for.
First, consider how comprehensive you want the LTC coverage to be, which will affect your premiums. For instance, do you want to just cover going into a nursing home, or just home-based health care provided by a nurse, or just adult day care, or a mixture of them or all of them?
Another factor that will affect your premiums is how much daily or monthly coverage you want. The more coverage you select the higher your premiums, but remember if you do need to activate the policy and your future costs are greater than the limit you have selected you will be directly responsible for making up the difference to the health care providers. Also consider whether or not you want a lifetime cap or unlimited lifetime coverage in sum total insurance policy payouts, based on the options available to you based on your age at the time of application.
Still another factor is benefit period. Most policies offer benefit period limits of anywhere from two to six years, but you can also pay to have a lifetime benefit period. Along with this, you’ll have to consider the duration of the elimination period (analogous to the “deductible” on other types of insurance). During the elimination period ALL accrued medical expenses that the LTC policy covers are paid out of your pocket. It is possible to have a zero-day elimination period, but your premiums will be quite high for this. Most policy providers’ elimination periods won’t exceed 100 days.
The longer this period the lower your premiums, all other things being equal, so this is one area where you can save quite a bit of money on premiums if you are relatively young, as you can reasonably expect to have enough money saved and invested in the future to finance one of the longer elimination period options should the need arise.
Also ask the insurance agent about an inflation protection feature. This will be very important especially if you are younger, what with health care costs constantly on the rise. Imagine what would happen to you if you selected a comprehensive coverage limit of $100 per day and 20 years from now you need to use the insurance but that same amount of medical care now costs $1000 per day!
Finally, one thing in an LTC policy that can substantially raise your premiums (even double them) BUT be extremely important is called the Non-Forfeiture Benefit. This feature will allow you to continue receiving the policy’s benefits even if you stop paying the premiums. If you are severely debilitated or financially destitute from paying your part of the medical expenses and aren’t able to pay the premiums in the future, this benefit could literally save your life or prevent your children from going bankrupt taking care of you.
About the Author:
Andrew Long writes for a series of websites about Care insurance and health related issues. A main area of expertise and content covers long term care insurance policy and disability insurance policies, as well as healthcare insurance
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