Five Important Things Your Long Term Care Insurance Should Cover
The threats of long term care are prevalent these days nursing home care is on its highest rate
, shortage of nursing home workers is brewing, and the scarcity of home care adds to the sentiment of millions of Americans. Long term care insurance is an important product but often overlooked. Yes, not everyone needs long term care insurance, but the present situation shows the perils of not insuring for the future.With nursing home costs soar roughly $75,000 a year, will you be able to pay the bills for more than a year? You might be able to, but you are putting your finances at stake. And, after all, most people could not afford such lavish cost. Otherwise, only a comprehensive long term care plan can help you deal with the problem.
There are five things that should be covered in long term care insurance policies. These are:
Inflation Protection: This is one of the most important features in LTCi policy. This automatically increases the daily or monthly benefits at certain percentage to help the policy keep pace with the inflation rate. It prevents you from paying increment every now and then when the price boosts. Even though the benefits are adding up every year, your premiums cost remains stable.
Inflation protection rider normally increases benefits at either simple or compound rates. These rates increase the life of a policy or for a certain fixed period of 10 to 20 years. Most of the policies sold today have inflation protection options:
5% Compound Inflation Protection
5% Simple or Equal Inflation Protection
Future Purchase Option
Consumer Price Index (CPI)
3% Compound
4% Compound
Multiple Coverage: A good LTCi policy should cover variety of care in different settings such as nursing home, adult day care, assisted living facilities, and even your own home. This can be paid for home health aides, adult day care providers, and caregivers.
Independent Care Management: It is important to ensure the insurance company allows you to receive care or assistance from independent care provider not from anyone whos working directly with the company. You may freely choose the type of care that best matches your condition. And once you need a claim, the insurer should send a representative to determine and attend to your needs.
Elimination Period: It is always misunderstood by most consumers. This is the waiting period the policyholder should pay the benefits on his/her own before the insurance benefit kicks in. The elimination period may start from zero to 360 days. The most attractive choice is the 90 day elimination period to keep the both premiums and outofpocket expenses manageable.
Daily Benefit Amount: This is simply the amount the insurance company will pay for your benefits. The amount can be as low as $50 to maximum of $500 a day. It is crucial to know the average cost in your area and your capability to pay before deciding on the daily benefit amount.
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