Executive Plans

Personal Lines

Resources   

Group Benefits

Commercial Lines

Individual Plans

Programs

Workers Comp

8 © 2007-2016 All rights reserved. Made by Group Coverage, Inc., 55 W. Ames Ct., Ste. 400, Plainview, NY 11803 Privacy Policy  | Terms & Conditions | Directions | Site Map

Contact Us

Insurance & Employee Benefits

877-GROUP-11 or 516-576-0007


Press ctrl for more than one benefit                       

Name

E-mail

Comments

Organization Name

No. of Eligible Employees

Street Address/Unit Number

City/Town

Zip/State

Type of Benefits Desired                      

Phone

Fax

Current Carrier

Request More Info

What features of long-term care policies should I focus on?


There are various questions and issues to keep in mind when choosing a long-term care policy.



Where may care occur?


The best policies pay for care in a nursing home, assisted living facility, or at home. Benefits are typically expressed in daily amounts, with a lifetime maximum. Some policies pay half as much per day for at-home care as for nursing home care. Others pay the same amount, or have a "pool of benefits" that can be used as needed.


Under what conditions will the policy begin paying benefits?


The policy should state the various conditions that must be met.





What events must occur before the policy begins paying benefits?




How long will benefits last?


A benefit period may range from two years to lifetime. You can keep premiums down by electing coverage for three to four years—longer than the average nursing home stay—instead of lifetime.


Indemnity vs. Reimbursement


Most long-term care policies pay on a reimbursement (or expense-incurred) basis, up to the policy limits. In other words, if you have a $150 per day benefit but spend only $130 per day for a home long-term care provider, the policy will pay only $130. The “extra” $20 each day will, in some policies, go into a “pool” of unused funds that can be used to extend the length of time for which the policy will pay benefits. Other policies pay on an indemnity basis. Using the same example as above, an indemnity policy would pay $150 per day as long as the insured needs and receives long-term care services, regardless of the actual outlay.


Inflation protection


Inflation protection is an important feature, especially if you are under 65, when you buy benefits that you may not use for 20 years or more. A good inflation provision compounds benefits at 5 percent a year. Without inflation protection, even 3 percent annual inflation will, over 24 years, reduce the purchasing power of a $150 daily benefit to the equivalent of $75.


Six other important policy provisions


  1. 1=7 Elimination period. Under some policies, if the insured has qualifying long-term care expenses on one day during a seven-day period, he or she will be credited with having satisfied seven days toward the elimination period. This type of provision reflects the way home care is often delivered—some days by professionals and some days by family members.


  1. Guaranteed renewable policies must be renewed by the insurance company, although premiums can go up if they are increased for an entire class of policyholders.


  1. Waiver of premium, so that no further premiums are due once you start to receive benefits.


  1. Third-party notification, so that a relative, friend or professional adviser will be notified if you forget to pay a premium.


  1. Nonforfeiture benefits keep a lesser amount of insurance in force if you let the policy lapse. This provision is required by some states.


  1. Restoration of benefits, which ensures that maximum benefits are put back in place if you receive benefits for a time, then recover and go for a specified period (typically six months) without receiving benefits.


For more information on long-term care insurance, you can access the Life and Health Foundation for Education OR America’s Health Insurance Plans.



Source:  Insurance Information Institute



Long Term Care Insurance Features


Key LTC Insurance Words

Inflation Protection

Elimination Period

Waiver of Premium

Third-party Notification

Nonforfeiture Benefits

Restoration of Benefits

Activities of Daily Living

Assisted Living Facility

Cognitive Impairment

Custodial Care