What you need to know about long-term care insurance
Q: Is there insurance for long-term care?
A: Long-term care refers to assistance with medical or personal needs over a period of time.
According to the financial institution,
Long-term care can be expensive and many people may not be able to pay the costs out-of-pocket. Long-term care insurance (LTCI) is an option that can help cover (or at least offset) the expense of long-term care.
Many people assume long-term care occurs in a "nursing home" type setting.
Actually, 73% of people receiving long-term care do so in their own home!
Insurance policies for long-term care have options that cover care in your home as well as in facilities.
Costs for long-term care insurance policies vary with factors like age, medical history and coverage level.
There are several different types of long term care policies.
A traditional LTCI policy will pay a set amount for each service – generally, with a daily or annual limit.
There are newer hybrid-type plans, which consist of a universal life insurance plan with an LTCI "rider."
The hybrid plan can be used for long-term care needs, but if the long-term care benefit is not used, your survivors can still receive the life insurance benefit. With a traditional policy, it's a "use it or lose it" scenario.
Long-term care insurance benefits are paid during a specified "benefit period," generally of three or five years.
You (the policyholder) are responsible for choosing what is called the lifetime maximum benefit, or the total lifetime amount you want the policy to provide.
Each long-term care policy is unique and it is important to understand how to initiate a claim — and the criteria to do so.
Usually, premiums cease when a claim is initiated. Other considerations include the daily and annual maximum benefit, elimination period calculation, levels of care or qualifying triggers.
Confusing, right?
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