Private insurance companies sell LTCI policies to offset the costs of long term care. LTCI is just like all insurance policies that requires premiums to help recipients avoid paying large amounts of money in the event of an illness or an accident. Premiums are based on the individual’s age by the time of the purchase and are always locked in for the life of the insurance policy. LTCI covers the following, {depending on the policy you choose: and is dependent on the policy that you choose:}
1.Care in a skilled nursing facility
2.Care in an assisted living facility
4.Adult day health care
When buying a LTCI policy, it allows the policyholder to select from many options, such as the amount of the daily benefit, the number of years that the policy will pay benefits, and, after the applicant qualifies for a policy, the number of months or days before the policy will begin paying benefits.
It’s very important to evaluate policies carefully to see which of them offers the benefits you require with a premium that will fit your budget. Policies differ in their contract conditions, deductibles, benefits and deductibles. It is also important to consider the rising cost of health care. Be sure the LTCI policy provides inflation protection for benefits to increase as health care costs continue to rise. Policies are generally labeled according to the place in which benefits are paid.
Take note that homecare only policies pay for care at home and in an adult day care or adult day health care facilities. Just make sure that the policy includes both types of day care. Facility-only policies pay for care in a skilled nursing facility and in an assisted living facility. These comprehensive policies pay for care in a skilled nursing facility, assisted living facility, adult day care or adult day health care facility, and at home.
Since LTCI claims are always paid many years after the purchase of the policy, it is imperative to check the following: The financial strength of the company. Some of the industry’s major rating services are A.M. Best , Duff and Phelps, Moody’s, Standard and Poor’s and Weiss Ratings . Reputation and claims-paying history of the company. Contact your State Insurance Department for more information on specific private insurance companies.
The applicant must be healthy at the time of the application. Each insurance company has individual requirements and/or limitations. Not sure when is the right time to buy an LTCI policy? Or how to assess what you will need from a policy? Visit our Expert Column on Financing Long Term Care to find out more.
