Long-Term Care Insurance: Policies and Benefit Choices (Free ...

The following is a guest post from Genworth Financial and is a follow-up to their post titled How to Buy Long-term Care Insurance: What Every Policy Should Include.

To continue the series on long-term care insurance, I?d like to further discuss important considerations when choosing policies and benefits.

As of 2010, two-thirds of people will need some long-term care, such as home care, assisted living or nursing home care after they reach age 65, yet only 35% of people believe they will need such care. That?s a staggering discrepancy, and speaks to an underestimation of the financial, emotional and even social anxieties that can result from under preparedness. But if you familiarize yourself with policies and offerings now, then you?ll be better equipped to make some important decisions earlier, rather than when it?s too late.

Here are some of the policy and benefit choices currently available:

• You can choose a daily benefit amount (say, $100/day), which serves as the maximum daily amount the policy will pay. The majority of policies range from $50/day to $500/day.? It?s possible to delineate benefits on a monthly basis, so you have greater flexibility in choosing when to receive care (if you have an arrangement with family members on certain days then this is especially helpful).


• Most policies allow you to choose the amount of the benefit received in proportion to the cost per setting (i.e. you may choose a policy that pays less for home care, which is less expensive than nursing home care). According to the U.S. Department of Health and Human Services, usually choices ?include a home care benefit of 50 percent or 75 percent of the daily nursing home benefit amount.?


• There is a difference between a Maximum Lifetime Benefit and the total lifetime amount. Generally, policies offer a fixed lifetime dollar amount of your choosing (for example, $200,000) that corresponds to a certain amount of time (as in a three-year or five year policy). It?s also possible to choose coverage with no dollar limit. Such ?Lifetime? or ?Unlimited? coverage allows you to receive benefits as long as you continue to need long-term care.


• Based on your needs, you can opt for a wider range of available services and settings, including in-home care in a ?comprehensive care? plan or ?facility care only.? The majority of policies are comprehensive, but if you look for ?a facility care only? policy, which is often less expensive, then determine beforehand that the facilities covered will be sufficient for your needs.


• It is also possible to customize coverage with additional optional benefits or ?riders.? With the cost of care rising beyond the rate of inflation, look for Inflation Protection (like that in many homeowners? insurance plans). Types of long-term care Inflation Protection are varied, so review carefully the options available in the policy. Commonly, Inflation Protection riders build the cost into the starting premium, so that cost doesn?t increase with inflation.


• Cost of long-term care insurance is based on age, health, the policy and the type of coverage you select. Not everyone is eligible for LTCI, and only sometimes are additional costs covered. There are many online resources available to assist you in determining overall costs and the type of coverage you need which provide estimates of LTC costs per state.

Review carefully your options, and consider rationally what kind of future you envision for yourself.

Source: http://www.freemoneyfinance.com/2011/10/long-term-care-insurance-policies-and-benefit-choices.html

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