Common Pitfalls In Purchasing Long-term Care Insurance
There have been so many debates as to the pros and cons of purchasing long term care insurance. Through the years, long-term care insurance is part of every household of aging individuals. There are so many advantages of LTC insurance that everyone should know, but, also, there are accompanying pitfalls that could ruin your plan.
So, how can you avoid the common pitfalls that you may encounter when shopping for long term care insurance?
Pitfall # 1: Not comparing prices and insurers
The prices and benefits vary from one insurer to another. The cost of the premiums greatly depends on the company's desire to attract more clients, and even its flawed pricing methodology. Some insurance companies lower their prices to become more affordable than their competitors. Prices tend to escalate when more features are included in the policy--but some of these features are barely needed or, let's say, useless.
There are insurers tha give the best value at superb quality, and the only way to find them is to look for them. It's important to shop around and comb every insurance companies you know to get the best benefits you need. Don't get caught with insurers trying to sweet-talk about the benefits and etcetera--although you don't actually need them. Be tactful and patient in finding the right company. Make sure the company has a cancellation policy for 30 days and it issue full refund. You should also double check if the company does not cancel or terminate policy regardless of your age or physical/mental health.
Pitfall # 2: Low-balling
Don't be too obsessed with very low priced insurance policies. Low-balled premiums may increase in the next few months or years as the company tries to recur the past prices. If it sounds too good to be true, then do not invest on it. You may ask the company about their rate increase history, and from there, check if they are reasonably priced. Remember, there's no harm from asking.
Pitfall # 3: What is really a "facility"?
The definition of "assisted living facility" and "adult day care" vary from state to state. One disadvantage of this is, for example, when you buy a policy in one state and then retire to a new state, the facility in your new state may not match with the definition in your policy.
To avoid this, make sure you understand clearly what kind of facility is stated in your policy before purchasing. Always ask your insurer about the facility included in your policy to avoid confusion and problems.
Pitfall # 4: Buying the same policy your spouse has
There are spousal discounts given to married couples or unmarried couples living together. Couples run this mistake of buying the same policies to save money. What's wrong with this? Women have different long term care needs--they live longer and tend lo live alone in their later years. It is important for couples which policy will benefit the other--the woman.
Pitfall # 5: Buying too far ahead
An agent would ask you to buy long term care policy at age 40 to receive lower premiums. Yes, it's true that the younger you buy LTC insurance, the lower your premiums will be; this is not always the case, though. The facility stated in your policy may no longer fit the description in the next decades because the improvement in technology happens so fast. It is advised to purchase policy within 10 years of expected use.
by: Christine Walker