Long-term-care insurance is one of the most complex types of insurance you may consider purchasing. Here’s a list of questions to ask that may help you better understand the costs and benefits:
What types of facilities are covered?
Long-term-care policies can cover nursing home care, home healthcare, respite care, hospice care, personal care in your home, assisted-living facilities, adult daycare centers, and other community facilities. Many long-term-care policies cover some combination of these. Be sure to understand what facilities are included when you’re considering a policy.
What is the daily, weekly, monthly benefit amount?
Policies normally pay benefits by the day, week, or month. You may want to evaluate what long-term-care facilities in your area are charging before committing to a policy.
What is the maximum benefit amount?
Many policies limit the total benefit they’ll pay over the life of the contract. Some state this limit in years, others in total dollar amount. Be sure to address this question.
What is the elimination period?
Benefits don’t necessarily start when you enter a nursing home. Most have an elimination period—a period during which the insured is responsible for the cost of care. In many policies, elimination periods can range from zero to 100 days after nursing home entry or disability.
Does the policy offer inflation protection?
Adding inflation protection to a policy may increase its cost, but it could be important if long-term-care services increase in price.
How are benefits triggered?
Insurance companies use specific criteria to trigger benefits. The most common is inability to do a certain number of the activities of daily living without assistance. The six activities of daily life used by most insurance companies are bathing, eating, continence, toileting, dressing, and transferring. Many policies also have benefits for Alzheimer’s disease or other forms of dementia.
How strong is the insurance company?
There are several companies that analyze the financial strength of insurance companies. The ratings can show you how industry watchers view various insurance companies.
What other policy options are available?
There are a number of other long-term-care policy options you may want to consider. Waiver of premium allows premiums to be discontinued once benefits are triggered. Third-party notice requires the insurance company to notify a third party whenever premiums have been missed—so the insured can have a child or trusted advisor make certain premiums are paid.
There are many factors to consider when reviewing long-term-care programs. The best policy for you may depend on a variety of factors, including your unique circumstances and financial goals. Citizen Advisory Group can help review the different options with you during a complimentary consultation.
Citizen Advisory Group is a comprehensive financial services firm that helps Northwest Ohio’s soon-to-be-retired and retired residents effectively plan for and prepare for life’s greatest journey. In addition to helping clients with their finances, Citizen Advisory Group offers monthly health and wellness events.
Please call 419-872-0204 for a complimentary consultation to review your individual financial situation.
Investment advisory and financial planning services offered through Planners Alliance, LLC, an SEC Registered Investment Advisor. Citizen Advisory Group is a separate and unaffiliated entity from Planners Alliance, LLC and Advisory Alpha, LLC.