What to Look for in a Long Term Care Insurance Policy

 

 

When you’re considering long-term care insurance, it’s important research the insurance landscape so that you can get a broad understanding of what’s covered and what’s not, even before you speak with an agent.
 
If you’re overwhelmed at the thought of long term care insurance, you’re not alone. There are a number of questions and outcomes you need to consider, and it’s well acknowledged that it takes a fair amount of research to make confident Long Term Care insurance decisions.
 
Fortunately, there a number of free resources available online that aim to assist you and your loved ones make well-informed decisions about long term care.  For example, providers like Genworth.com provide access to recent Long Term Care studies and statistics, along with tools like insurance calculators and a Cost of Care Map, which provides a state-by-state rundown of long-term care costs.
 
Once you have sense of what you need to know about long term care insurance, then work with an agent who can give you a breakdown of not just one policy, but a cross-section, and can guide you through various policies and options.  In addition, every state has an insurance regulatory department to aid consumers and it behooves you to take advantage of those services.
 
Here are the key points that your policy should include:

  • One year of care coverage at minimum (nursing home or home health care should not be limited to skilled care – give yourself options)
    • This should also include intermediate and custodial care
  • Coverage for Alzheimer's disease (if developed after purchase of plan)
    • Consider this startling statistic from the Alzheimer’s Association: about 5.4 million Americans have Alzheimer’s disease; this translates to one in every eight Americans age 65+, and nearly half of Americans aged 85+. This is an important clause in any policy.
  • An inflation protection option to either:
    • Automatically increase the initial benefit level on an annual basis
    • Guarantee the right to increase benefit levels periodically without providing evidence of insurability
  • “Outline of coverage" describing all benefits, limitations, and exclusions
  • A comprehensive guide of all plans available provided by the company so that you can compare policies and determine what meets your needs best
  • Guarantees that the LTCI plan will be there for you when you need it most; the policy should not be permitted to be canceled, non-renewed, or terminated by the company at their discretion because you are experiencing mental or physical problems
  • Ability to return the policy and receive a premium refund; you should have 30 days to be able to reconsider in what is called a “free look” period
  • Policy purchasers should not have to fulfill preexisting conditions before being able to opt for a plan (preconditions to look out for include hospitalizations or care of any kind)

 

Source: Genworth Financial

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