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What You Need to Know About Long-Term Care Insurance

Many people are under the mistaken belief that Medicare and Medicaid supplement policies will cover the cost of long-term care. While these plans provide benefits to help pay for hospital care and physician services, they provide very limited payment for the cost of long-term nursing home care.

We review the following questions with our clients:

  1. How much coverage do I need? You must decide on a daily benefit amount which is the amount of payment you need to help cover the cost of care.
  2. You need to decide on the benefit period which can range from two years to lifetime coverage.
  3. Does the policy cover nursing home, assisted living and/or care in your own home?
  4. What is the elimination period? This is the period of time during which you will have to pay on your own before payments under the policy begin.
  5. What triggers payment under the policy terms? You become eligible to collect benefits under most policies when you have been diagnosed with a cognitive impairment or are unable to perform two (sometimes three) activities of daily living. It is also important to understand who will be responsible for making this decision.
  6. Is there inflation protection? The amount of coverage you need today may be inadequate 10 or 20 years from now. Most companies offer inflation riders for an additional premium.
  7. Is the insurance company highly rated?

Where to Go for Help Many of the questions we have raised are complicated, but they are important in understanding what you are buying. When deciding whether to buy a long-term care policy and what type of coverage to buy, you need to carefully review the policy’s terms. Give us a call we can help.