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Insurance--Long-Term Care Insurance
Policy features of long-term care
insurance
Most policies will generally require you to have an acute medical condition that requires skilled nursing care before your benefits kick in. The best coverage, and most expensive coverage, comes from policies that allow you to start receiving benefits if you suffer from a cognitive impairment such as Alzheimer's disease.
Some of the most commonly used benefit triggers are certain activities of daily living that you can no longer perform on your own. Most policies require that you can no longer perform two or three of the daily activities. They often include:
" Bathing
" Continence
" Dressing
" Eating
" Toileting
" Transferring
Bathing, for instance, is usually the first activity that a person is unable to perform, according to the National Association of Insurance Commissioners. You can qualify for benefits under a policy that includes bathing as an activity easier than you can that doesn't include bathing. Ideally, you want a long-term care policy that requires the inability to perform two daily activities.
Good long-term care policies cover all levels of care, including custodial and personal care, in many different settings. Those setting should include:
" Adult day care - sites that provide personal care and recreational services on a daily basis.
" Assisted living facilities - living quarters that provide individualized personal care and health services for those who need help, when they need help.
" Facility care services - these are licensed agencies that provide skilled nursing care and therapy in home or at site.
" Nursing facilities - residential sites for people who need full-time medical care. Most stays are for a short rehabilitative period after an illness or injury.
You should know what types of services and facilities are covered by your long-term care insurance policy. If you don't go to an approved type of facility, you could find the company will refuse to pay for your care.
Ask if the policy includes a nonforfeiture benefit, which is an additional long-term care coverage you purchase that protects the policy's value if you drop it or let it lapse. This benefit will offer some protection for your investment, but it will increase your premiums. If you are confident that you will always be able to pay your premiums, even if they go up, you can lower your overall cost by passing on nonforfeiture benefits.
A waiver of premium will allow you to stop paying your premiums during the time you are receiving benefits. Read your policy carefully to see if there are any restrictions or limitations to this benefit. Some policies will require that you be in a nursing home for 60 to 90 days before your premiums are waived.
The majority of long-term care policies are
guaranteed renewable - the insurance company guarantees you the right to
renew your policy. It doesn't give you the right to a fixed premium.
Premium amounts usually increase over time. You won't be singled out for a
rate increase, no matter the amount of your claims, but you should know
that state regulators often grant increases in premiums to insurance
companies to cover a large number of expensive claims overall.