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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
(www.standardandpoors.com)
Moody’s (www.moodys.com
) or A.M Best
(www.ambest.com).
You 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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