Elder Law

Things to Look for in a Long-Term Care Policy

Buying a long-term care insurance policy is an important decision and can be a key element in your financial planning for retirement. Coverage can be critical in affording long-term care and having choices for your care. There are a number of factors to keep in mind as you try to choose the best policy to meet your possible future needs.

  • Cost. Look at premium cost. Premiums are most affordable if you buy a policy during your middle-aged years. Wait until your 70's or 80's and you may be uninsurable or the premiums will be out of reach. Is there room in your current budget for premiums without changing your standard of living?
  • Coverage amounts and inflation provisions. You'll need to figure the cost of care in your area, the services or benefits you'll want, your income and premium amount. Benefits may be paid on a daily or monthly basis
  • Benefit periods. You can choose how long you'll receive benefits under a policy. This can be a hard choice - you want to try to buy what you think you'll need. For example, you could choose coverage for the rest of your life, or limit the benefit period to five years. Buy at least a year of coverage
  • Services covered. Policies can cover everything from in-home care and services to nursing home care
  • Waiting periods. You can choose how long you'll have to wait before benefits are paid once you're receiving care. Waiting periods usually range from 0 to 100 days, and the longer the waiting period, the lower the premium
  • Deductible. It's wise to make sure that there's only one deductible for the life of the policy. It's possible that you could receive care at different times, for varying periods. For example, you might need services for a few months after breaking your hip and need care later on a permanent basis
  • Coverage triggers. These are the events that must occur before benefits are paid under your policy. Common triggers are requiring help with two activities of daily living (ADLs), such as bathing and eating. Make sure a hospital stay isn't required before benefits are paid
  • Coverage for dementia. Make sure the policy covers dementia, which is a common reason for needing long-term care
  • Changes in level of coverage. It's a good idea to buy a policy that guarantees your right to change coverage levels. You may want to buy more coverage or reduce it, depending on your circumstances down the road
  • Policy renewal as long as you pay the premiums. Also be sure to review the policy, and pay premiums only to the insurance company, not to your agent

Questions for Your Attorney

  • Can an insurance company refuse to sell me a long-term policy because I'm 72 years old?
  • What coverage amount should my long-term insurance policy provide?
  • Which is better - coverage for a set amount of time or for life?
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