The Basics Of Long Term Care Insurance
When we talk about long term care, most people normally raise their eyebrows and pretend not to care. Although the need for long term care is obviously high and important, many elders choose to remain at home and receive traditional care to keep their assets untapped for their childrens future.
Some experts say that the next financial crisis is not recession; its the cost of long term care. In 2004, MetLife conducted a survey on the cost of long term care and revealed the average annual rate for nursing home was $70,000 and home care rate was more expensive. This is why many sick and frail elders choose to die rather than succumb from the ripping prices of long term care.
Becoming uninsured is far threatening than losing your home from fire or car from accident. Death sneaks in no matter how hard you try to avoid it, especially if your age and health intervene. The longer you live, the longer you put your life and savings in jeopardy. What if you are afflicted with debilitating illness that would need treatments for three or more years? Long term care insurance is by far the most important investment you will make for your retirement. The benefits you will accrue from LTCi are not only beneficial to you, but your loved ones as well.
When should I buy?
You can buy policy in your early 50s or mid 70s. However, it is advisable to buy policy at younger age because you can lock in the amount of premiums and the cost of annual premium is much cheaper. Another advantage why you should purchase earlier is because of your health condition. Insurance companies usually look at the applicants medical history as basis for coverage. The company has the right to refuse an applicant with chronic disease, depending on the companys policy.
How much is LTC?
Theres no fix cost for long term care insurance. The company looks at the persons age, medical history, and the state where he/she lives (the costs differ from state to state) in determining the price of the premium. In group plans, your medical records are still scrutinized but premiums are generally lower compared to individual plans.
How much coverage do I need?
This is a million dollar question for most first-time applicants. Many applicants dont know how much they would need probably because they were trying to skimp the premiums or simply indecisive. The coverage is normally quoted in dollars per day. The normal coverage starts with at least $200 per day.
Why should I include inflation protection?
Inflation pushes the prices of long term care in its highest price index. Without inflation protection, your $60,000 annual premium could go more than $70,000 in few years. Inflation protection ensures your benefit will stick on its fixed amount, but the benefits increase to cope with the rising cost of long term care.
When does coverage start?
You are covered the moment you sign the policy. The payment begins when your doctor confirms that you need assistance for daily living activities as stated in the policy.
by: Jenny Nielsen