Last week I discussed some of the things that Long Term Care (LTC) Insurance is, some that it’s not, and why it is important. LTC Policies can be as varied as the needs of the people requesting them. When looking into a policy, it is very important to check that the policy is offering you what you need. Policies differ greatly both in and among companies as well as in different countries. It is important to assess what you feel your needs will be. Here are some of the items that I feel are important to check out when looking into LTC Insurance.
In the area of payment for care:
Will the policy pay you a lump sum that will enable you to hire any one you wish to provide the services you need? Are you required to hire only professionals or licensed practitioners for all tasks? Agencies charge much more then private caregivers for basic care and your money will not stretch as far. Can you hire family members? Do you have to show receipts for reimbursement? The elderly and ill may have a hard time putting out the money up front as well as keeping all the receipts in order. Will the amount you are paying in premiums stay the same or will they change over time?
Is there flexibility?
Can the money be applied to home modifications, medical supplies, supplies for incontinence and/or drugs as needed? Is there a discount for couples both taking out a policy at the same time? Is there a spousal waiver benefit, which considers both policies paid up upon the death of one spouse? Will one partner need to continue to pay the premiums on his policy while the other partner is receiving benefits? Does the policy apply in other countries such as Great Britain, Canada, the U.S. and Israel or only in the country in which it was purchased? Is there a provision for non-payment during job loss? Are the premiums waived when the policy is being paid out?
Will the policy pay if you are in a facility? Will it help cover the cost of a facility? What kind of facility will it cover (hospice, assisted living, nursing homes, adult day care etc.)? Is there any refund of premiums on death if no benefits were ever paid out? (This perk often makes the policy more expensive). Can your benefits offset the transportation costs that may accompany treatment? Will it cover respite care?
Other basic areas of concern:
Who will decide what your needs are? Is your physician involved? Do you have a say or is everything decided without your input? Does it cover supervision for cognitive impairment or just physical needs? Is the waiting period (during which time you are responsible for the cost of your care) for the policy benefits to begin based on calendar days or working days or need days? Most policies have a waiting period from the time of approval of benefit to payment.
Let us say there is a 30-day waiting period. If your waiting period is calendar days, your policy will kick in after a month. If your policy is based on need days and your waiting period is 30 (need) days, and the company determines you need assistance twice a week, you will need to wait almost four months for your benefits to begin. Your need days are only two days a week and 30 need days must pass before the policy can kick in. Usually the longer the waiting period, the lower the cost of the policy. Have you chosen a waiting period that will be right for you? Is the benefit payment tax-free dollars? If there is a disagreement about what care is needed, who has the final say?
Before taking out a LTC policy, make sure you know what your benefits will be. Understand what services will be available to you and plan ahead. Look at the big picture and make sure your policy suits your needs and budget. If you have a financial advisor, Long Term Care Insurance is something you should discuss with her in detail. She can help you determine which policy and which benefits make sense for you.
My thanks again to Terri Allister and Hetti Pfeiffer ([email protected]) for giving me their time and expertise on the subject of Long Term Care insurance.
You can reach me at [email protected]
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