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Long-Term Care

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Tips for Buying Long-Term Care Insurance
By Mary Damiano

(Page 1 of 3)

The decision to buy Long Term Care Insurance should not be entered into lightly. There are many things to consider and many options available. Purchasing a policy without making and informed decision can be a costly mistake. Before buying anything, be sure to ask these questions, which serve as a basic guideline of things you need to know.

  • Have you shopped around? Talk to different companies and compare benefits. Do not buy a policy simply because itís the least expensive; always compare the coverage. Ask each agent for an outline of coverage, which summarizes each feature of the policy. Stay away from agents who tell you this is a one-time offer.
  • Is everything youíve been told actually in writing? Make sure that whatever youíre told about the coverage is written in the policy.
  • Do you understand everything about the policy? If there is something you donít understand, keep asking until you do understand. Better yet, have an objective third party, such as an attorney, read the policy and explain each item to you.
  • Can you afford the premiums? The important thing to consider is not whether you can afford the premiums now, but whether youíll be able to afford them then. Many people on fixed incomes find their policies cancelled when they canít pay skyrocketing premiums.
  • Does your policy have inflation protection and how is that protection computed? A policy that pays $100 a day for nursing home care may sound good now, but what happens years from now when you need a nursing home and they cost $400 a day? Also, make sure the benefit for this coverage is calculated using the compounded interest method rather than simple interest.
  • Does the policy provide death benefits and non-forfeiture benefits? While these features can increases premiums, they can be nice to have. Think of them as a consolation prize. A policy with death benefits pays your estate premiums minus benefits youíve already received; non-forfeiture benefits means that if your policy is cancelled for non-payment, youíll get back some benefits.



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