If you’re considering long-term care insurance, then it’s a good idea to get a sense of the landscape before buying a policy becomes a necessity. Policies vary based on location (state), facility and age. Nursing home costs will be different from in-home costs. And as your needs will vary, you should understand the implications of all options. If location is important to you and your family then, there are certain things that you should consider now.
Long-term Care Policy Checklist
The following is a checklist designed to help you cull through available policies:
1. Understand the services covered by a policy. Does it include:
- Nursing home care
- In-home care
- Assisted living
- Adult daycare
- Alternate care
- Respite care
- Anything else
2. What does the policy pay per day for the various types of care? (Go through the list covered in the first point and understand the answer to each of those types of facilities.)
3. How long do you foresee needing the benefits to last for each type of care? How long does the policy extend?
4. Can you calculate the RIGHT amount? Don’t buy too much – or too little. To help make an estimate of your needs, check out his long-term care savings calculator from the National Clearing House for Long-Term Care, provided by the US govt.
5. What is the maximum lifetime benefit? Maximum Lifetime Benefit and the total lifetime amount are separate things and 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 policy). It’s also possible to choose coverage with no dollar limit. “Lifetime” or “Unlimited” coverage allows you to receive benefits as long as you continue to need long-term care.
5. Does the policy have a maximum length of coverage for each period of confinement? If so, what is it for nursing home care? For home health care? For an assisted living facility?
6. Are certain common conditions including Alzheimer’s and stroke covered?
7. You can opt for certain services and settings, including in-home care in a “comprehensive care” plan, or “facility care only.” Most policies are comprehensive, but if you look for an often less expensive “facility care only,” then determine beforehand that the facilities covered will be sufficient for your needs
8. Can you customize coverage with additional optional benefits or “riders?” The cost of care is rising beyond the rate of inflation, so it’s a good idea to look for Inflation Protection (this functions the same way as it does in homeowners’ insurance plans). Types of long-term care Inflation Protection vary, so review the options in the policy. Commonly, Inflation Protection riders build the cost into the starting premium, so that cost doesn’t increase with inflation
9. Are there certain preconditions or assessments that need to be done including an assessment of activities of daily living or cognitive impairment? Are there any physician certifications? Is a prior hospital stay required (as it is in Medicare)? Other?
10. Is there a renewable guarantee?
11. Is there a free look period that guarantees 30 days to reconsider your policy choice?
There is a lot to navigate within the long-term care insurance market. It’s a good idea to talk to an agent or representative who can let you know the options. Also, remember that there are insurance standards that are upheld by every state. But even before that, know what the landscape is.
