Understanding Long-Term Care Insurance
What is long-term care insurance?
Long-term care insurance can help pay for medical, personal, and social services for people with chronic or disabling conditions. People who qualify for long-term care usually require nursing care or constant supervision.
Who might consider long-term care insurance?
Keep in mind that long-term care insurance is not for everyone. It can be costly and can come with lots of restrictions. Still, long-term care insurance can be an important option to consider when preparing for the future.
If you develop a health condition that requires long-term care and you do not have long-term care insurance, you may have to pay the entire cost of long-term care out of pocket, which can be a huge financial burden. Long-term care is not usually covered by traditional health insurance plans. Medicare generally does not cover long-term care either. Age and any health conditions you have can affect eligibility and cost.
Where can a person receive long-term care?
You can receive long-term care at home, or in an adult day care center, an assisted living facility, or a nursing home.
How does a person purchase long-term care insurance?
Long-term care insurance can be offered through an employer. Or you may be eligible for coverage through a union, fraternal group, or other organization to which you belong. In addition, many insurance companies offer individual long-term care insurance.
Factors to consider
Long-term care insurance plans vary from policy to policy. There are lots of factors to consider. These include:
||Why it matters
||Some policies cover nursing home care. Others may cover only home care. It's important to find out which services are covered.
|Daily or monthly benefit
||The daily or monthly benefit is the amount of money the insurance company will pay for each day or month a person is covered.
||The benefit period is the length of time in which a person will receive benefits.
|Elimination or waiting period
||Elimination or waiting period is the amount of time a person must pay long-term care expenses out of pocket. The longer the waiting period, the lower his or her premiums are likely to be.
||Health care costs tend to rise each year. Inflation protection helps manage the rising costs of long-term care.
||Policies with a nonforfeiture benefit will continue to pay for long-term care even if a person stops making payments. This feature can add to the premium.
Important things to know
- It's always a good idea to shop around for a long-term care insurance policy. Compare features and benefits, as well as cost.
- Never pay an insurance agent in cash-write a check directly to the insurance company. This can help protect against fraud.
- Keep in mind that a "free look" clause allows you to review a long-term care insurance policy and cancel it within a certain number of days. Contact your state insurance commission for specific details.