Long term care insurance

Make sure your long term care policy will pay for the care you want

Make sure your long term care policy will pay for the care you want

1.  What is long-term care insurance?

These policies provide payment if a claim is made for a covered event relating to long term care.  Long term care is becoming more common place and prevalent and many employers offer long term care insurance as a benefit or part of a cafeteria plan.  You cannot get long term care insurance if you do not medically qualify.  For example, if you have already been diagnosed with a degenerative illness such as Parkinson’s or Alzheimer’s disease, you cannot get a policy. You can buy a policy at a fairly advanced age so long as you are healthy, however, the premiums will go up exponentially with your birthdays.

2.  Understanding long-term care insurance options.

These policies vary widely with respect to the coverage provided, the requirements for receiving payment, and the maximum amount or length of time for which payment will be made.   Some policies only cover nursing home care, while others cover home care and assisted living as well.  Some policies are unlimited in duration, while others limit the number of years or the amount of money that will be paid.  Some policies increase each year the amount per day or per month that will be paid, while others do not.  If you have long-term care insurance that will pay at least the difference between your income and the cost of long-term care, then you will not have to spend any savings or apply for Medicaid as long as the long-term care policy continues to pay.  But if you wait too long, you may be caught off guard when you need it the most.  For example, you have a policy that pays $75 per day for assisted living.  This will help you get into a great place, but you find out, too late, that it has a five month elimination period.   Many end up in a nursing home because they cannot afford an appropriate, lower level of care.  Make sure you know what your policy says!