All About Long Term Care - a guide to help you select the best long term care policy.
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Selecting the best Long Term Care Policy

Selecting a Long Term Care insurance policy that suits your needs often becomes a daunting and complicated task. There are many types of policies that can vary from provider to provider and allow you to customize a long term care insurance policy. At All About Long Term Care, we will help you cut through all confusion and assist you in choosing a policy that's right for you.

Some facts to keep in mind and some good questions to ask yourself as well as the insurance company before selecting a long term care insurance policy.

What kind of care does your Long Term Care Policy provide?

A good long term care insurance policy should have coverage for skilled care, intermediate care, custodial care and homemaker services.

At what locations will my new policy be covered?

You should have the ultimate choice of where your Long Term Care policy will be received. Generally, a good policy will allow you to have all options like your own home, another private home (a relative, a friend), adult daycare centers, adult group living center, nursing homes, alternate care facilities, assisted living centers, and hospice care facilities.

When do my benefits start?

With a Tax Qualified Plan, there are two benefit triggers:

1. You need assistance with two or more of the six activities of daily living for a period of at least 90 days.
  • Bathing
  • Continence
  • Dressing
  • Eating
  • Toileting
  • Transferring (to or from bed or chair)
2. You require supervision and assistance due to severe cognitive impairment.

With a Non-Tax Qualified Plan there are three benefit triggers:

1. You need assistance with two or more of the 5 activities of daily living:
  • Bathing
  • Dressing
  • Eating
  • Toileting
  • Transferring (to or from bed or chair)
2. You require supervision or assistance due to cognitive impairment.
3. Your physician or personal care specialist certifies that it is medically necessary for you to receive care.

Is my policy guaranteed to be renewable?

Most long term care policies sold today are guaranteed renewable. This protects you because the company can not cancel your policy as long as your premium payments are on time. Additionally, it allows you to renew your coverage every year without having to provide proof of insurability.

What if they want to change the price of my premium?

Level premiums provide a certain amount of protection for you. Although, it doesn't guarantee that the price can't or won't go up. On an individual basis, premiums cannot change. The company can't just raise your premium. They can, however, raise the premium for their entire group of policy holders (only with state approval).

Does my policy have inflation protection?

Make sure your policy contains an inflation protection rider to offset the rising cost of long-term care. With an inflation rider, your benefit amount will increase each year the policy is in effect (the rate of the increase varies from policy to policy). The amount of the annual increase may be a percentage of the original benefit amount (a "simple inflation rider") or a percentage of the previous year's benefit amount (a "compound inflation rider"). Without an inflation rider, the rising costs of benefits provided by your policy could be completely inadequate by the time you actually need them.

Waiver of Premium

In the policy, this clause will allow you to stop making payments on the premium while you are receiving benefits.

What if I dislike my policy and want to return it?

With a new policy, you should have a 30-day cancellation clause that allows you to cancel your policy and get a full refund of any premiums paid.

Are respite facilities covered?

Respite facilities provide temporary care for an elderly or disabled person. They exist to provide care for the person while a permanent caregiver may be taking a break. Respite care may also be offered at home through services like a health care assistant or at a facility like at a nursing home.

Does My Policy Have A Grace Period?

All companies are required to to give a 30-day grace period. During this time a person can pay up their premium without a lapse in coverage.

Most states require that long term care insurance policies include a third party notification provision. This third party notification allows the company to contact someone you choose such as a friend or relative. They are notified of your non-payment and granted an additional 30-day grace period in which to pay premiums.

Background of the insurance company

Always comparison shop for a policy before you decide to buy one. Check out the company's background and it's stability. Online, you can review insurers at A. M. Best. Make sure the company you choose for long term care insurance is stable enough to be around when you need your benefits. Find about more about the company's long term care policies. Find out how long it has been offering long term care insurance policies. Finally, see how it rates against competing long term care providers.

The Expert's Advice

The National Association of Insurance Commissioners (NAIC) has developed certain standards to aid consumers in selecting appropriate insurance coverage. The NAIC says a good policy will include these provisions:

  • At least a year of care in a nursing home or benefits for home health care.
  • Coverage for Alzheimer's disease, should you develop it after purchasing the policy.
  • Inflation protection options:
    - Automatic increases to the benefit level on an annual basis, or
    - A guaranteed right to increase your benefit level periodically without providing evidence of insurability.
  • A map of the policy, that is, an explanation of your benefits, coverage, limitations, and items not covered.
  • A long-term care insurance "shoppers guide" which helps you decide whether long-term care insurance is appropriate for you.
  • A guarantee that even if your health deteriorates or you age, the policy cannot be canceled for those reasons.
  • The ability to return your policy after 30 days
  • No requirements that you be hospitalized before receiving nursing home benefits or home health care benefits.
  • No requirement that you receive skilled nursing home care before receiving benefits for intermediate or custodial nursing home care.
  • No requirement that you receive nursing home care before receiving benefits for home health care.

After all of these questions have been asked and adequately answered, and all of the provisions of a good long term care health insurance policy have been covered, your job of picking the right Long Term Care policy should be much easier.

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