What To Look For In A Long Term Care Insurance Policy?
Buying long term care insurance is a serious decision, so be extra careful in deciding the type of policy and what it covers. Insurance companies have different definitions of some terms of services that make it quite confusing and vague for policyholders. For instance, there are companies that define "disability" as a condition that makes an individual unable to perform regular activities, while others define this as serious medical condition. it's important to ask your insurer what those services really mean from their standpoint. Here are other things you should watch out for in your policy:
In other insurance, this is referred to as "deductible." This feature allows the price of the policy to remain the same regardless of inflation. The price of the premium is not affected, but the benefit amount of the policy should automatically increase each year to recuperate the costs of long term care. In deciding whether to purchase inflation rider or not, research first on how the cost of nursing home has increased in recent years in the state where you belong. Simple inflation is much cheaper than compound inflation rider, but the type should depend on your needs and age.
The deductible should be defined in the policy comprehensively. The definition varies which means a dollar amount or a period of coverage. Always ask your insurer about those terms to avoid future disputes.
Coverage is the amount of expenses the policy pays. There are different types of policies offered from company to company. Some policies pay long term care expenses on a daily basis. The cost of coverage is affected by the type of facility whether at home, at a nursing home, or at other professionally-run facilities. Don't forget to check what the policy covers to avoid costly mistakes. it's better to be prudent that lost everything that you have worked for.
Period of coverage
The coverage has certain time period depending on your needs. Additional coverage obviously requires added premiums.
1. Assess Your Needs
No one can dictate what's best for you, but yourself. Look at the factors such as your age, health, and financial capability before purchasing long term care insurance. Conducting research on long term care costs in your area can give you good idea of whether using LTC or not.
2. Consider policies that cover the kind of setting you need
The policy can cover nursing home, assisted living facilities, and home care. Although most people consider home care as much as possible, experts recommend buying coverage for facility care because home care does not provide the best level of care for patients with serious medical condition.
4. Protect your Premiums from Sky-rocketing Inflation Rate
Inflation riders eventually increase the costs of premiums, but this addition pays off in the long run. A policy with at least 5 percent compound inflation protection will increase to compensate with the increasing prices of long term care.
5. Think of elimination period
If you can afford to pay 30 to days from your own expenses, then include the elimination period feature in your policy. This will cut down the cost your premiums since you'll be paying the first period before the insurance kicks in.
6. Always purchase only from established insurance company
The success of your LTC depends largely on the company. Buy policies from established company with good credentials and experience in selling this type of insurance. Well-rated companies can be found on rating agencies like A.M Best.
by: Marcia Cross