The Risks Of Long Term Care Insurance And How To Deal With Them
The cost of long term care increases every year that burdens many elders, particularly those who are uninsured. As LTC costs skyrocket, the need for long term care insurance becomes more pressing because nobody wants to trade wealth with nothing and die unprepared. Long term care insurance is often overlooked because most people assume that it is just a waste of money and they can just self insure. It is not surprisingly expensive but its benefits pay off in the long run. This coverage can be used in paying for nursing home and any other type of care that will someday soar up to the rate they are no longer affordable for the masses.
Just like some types of insurance, there may be some risks associated with long term care insurance particularly if you dont know how it works. Here are some problems with long term care insurance and how can you deal with them:
You could pay more than what is needed
Long term care insurance price varies largely on the insurer and the length of coverage. In New York, for example, a policyholder in late 50s would pay between $900 and $7,000 annually, while a 70-year-olds premiums could be between $3,000 and $10,000 a year.
To keep your premiums more affordable, always ask suggestions from LTC agent or financial expert on which type of coverage will suit you, and then compare those policies. You can also get information from your state insurance department on the average costs of policies taken by the majority of its residents. Insuring every possible scenario is not practical; be prepared of paying outside costs on your own. Consider purchasing a policy that pays benefits for two or three years (the normal nursing home stay) and allot limited budget of, for example, $100, which is way cheaper than the usual daily benefit. Many policies extend coverage if you failed to finish the full daily benefit, thats why three-year coverage is already enough
Your premiums could soar
Consumers are often encouraged to buy policies as early as they can to lock in the benefits and get much cheaper premiums. Agents telling consumers that early coverage secures low rates is partly true.
Actually, you cant predict how and when the insurance company will raise rates. But the truth is: the younger you are the more your premiums will suffer from price hike. If you suffer from price hike, your options will vary on the state law.
Your claims could be denied
Aside from rate hikes, another problem that bothers many policyholders is getting denied from LTC claims. Many insurance companies (we dont generalize) make it hard for the policyholders to get claims because they know older people dont argue much and sick people dont last long.
One way to secure your claims in the future is to familiarize yourself with the policy. Before you sign up the policy, read everything that relates to claims including the statement that discusses what is covered or not. A simple background check and research can help you determine how well the insurer performs claims process.
by: Jenny Nielsen