Long term care insurance
A long term care insurance policy can help pay for assistance with activities of
daily living such as bathing, eating, and dressing, as well as skilled nursing care
or rehabilitation, either in a nursing facility or at home.
Coverage options:
- Home healthcare: Covers care provided in the home by a professional caregiver such
as a home health aide, registered nurse, or homemaker.
- Informal care: Covers care provided by friends or family who provide care similar
to what would be provided by a professional caregiver.
Inflation protection: Helps protect you from the rising cost of
care by increasing the benefit using a medical inflation rate (anywhere between
1 and 8%). Both simple and compound rates are offered.
Benefit limits: The length of time (such as 3 years or lifetime)
and maximum amount of coverage (such as $200,000) the policy will provide for.
Waiting or elimination periods: The number of days you must be
disabled or incapacitated before the benefit begins.
Non-forfeiture benefit: If you stop paying your policy, you may
still be able to receive some of the benefit from previously paid premiums.
Future purchase option: Enables you to increase your benefits periodically,
such as every second or third year.
Paid-up policy: Enables you to cease paying premiums after a specified
period.
Return of premium: Enables you to receive funds on the premiums
you’ve paid after surviving for a specified period.
When comparing policies, many people find the following policy features especially
important:
- No exclusions for pre-existing conditions
- Ability to downgrade without premium increase
- Insurance carrier’s high financial rating
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Advantages |
Disadvantages
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Covers some or most of the different types of long term care services, including
custodial or personal care.
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Monthly premiums can get expensive particularly for older adults. You might not
be able to continue to pay the monthly premium.
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Lets you choose the type of coverage and customize your care based on your needs.
You will have greater control over how, where, and by whom long term care is provided.
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You can’t predict exactly what kind of care you or your loved ones will need. Even
if you buy long term care insurance, you may have to pay additional long term
care costs.
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Your family or friends won't have to worry about how your long term care will be
funded. You may reduce the burden on family members when you need care.
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You might not be able to purchase a long term care insurance policy due to an existing
health problem. (This may not apply when enrolling in coverage with your employer
during predetermined specific times.)
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By enrolling in your company’s benefit, you can take advantage of group rates that
may be lower than individual rates.
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You’re less likely to need to use your savings or life insurance to pay for your
healthcare needs, thereby protecting your retirement assets and those of your spouse.
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