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Long Term Care Insurance: What is it exactly?

Long term care insurance: Who needs it anyway? Page #1

Long term care insurance: Who needs it anyway? Page #2

Selecting the Best Policy  Page #1

Getting the Right Policy #2

Necessary Features of Long Term Insurance Plans #3

Long Term Features Page #4

Web Site Map

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Long term Care Insurance: Getting the Right Policy 

What do you look for in a long term care insurance policy?    Page #2 

You should look for the following features in shopping for a long-term care insurance program: 

A solid company. You should look for a well-known, stable company with a good reputation.  Buying from a strong company is absolutely essential because the long-term care insurance field is still young and companies have little history in which to base their underwriting assumptions.  A strong long-term care insurance company will be better able to absorb errors in estimates. 

It is also a pretty good idea to check the company's rating with Standard & Poor's ( Moody’s ( ) or A.M Best ( should look for one that falls within the top two categories related to their financial strength.  

You should ask the company how long they've been providing long-term care health insurance.  A company who has been in the market for a while (perhaps 10 years or more), will be more experienced and their rates will be more stable. 

It's also worthwhile to call the state insurance department, which may have information about complaints that have been made against particular insurance companies. 

You should always be especially suspicious if a salesperson tells you that the state will guarantee coverage if the company goes into default.  The premiums may be higher for these long-term care insurance policies, and if the company fails you can count on the fact that the coverage offered by the state will not be as generous as the original policy. 

Tax qualified. Most long-term care insurance policies are qualified, but you should still check and make sure that they are.  "Tax qualified" means that a policy conforms to the 1996 Health Insurance Portability and Accountability Act, or HIPAA. What this actually means to you is that the benefits cannot be taxed, also, a long-term care insurance policy must be qualified if someone wants to deduct the premiums as "medical expenses" from their taxes.  (These expenses must be greater than 7.5% of a person's adjusted gross income). 

Comprehensive coverage. "Facility-only" policies cover only one type of care, usually nursing homes.  Most long-term care insurance policies, however, offer "comprehensive" coverage. These policies should cover care in a nursing home or assisted-living facility, as well as care provided at home, adult day care, hospice care, and even respite care.  It makes more sense for most people to buy a comprehensive policy, which gives them more and broader options in their long-term care insurance coverage. 

Also, See  Necessary Features of Long Term Insurance Plans #3

Some information from How to Care for Aging Parents by Virginia Morris 

Additional information and web page by Paul Susic M.A. Licensed Psychologist Ph.D. Candidate  Clinical Director- Senior Care Psychological Consulting

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