Deciding to purchase a long-term care insurance (LTCi) policy requires you to consider the benefits, including a wide range of options that will answer your future needs.
You need to keep a balance between your budget and the policy’s premium and coverage.
Here are LTCi benefits you should consider:
1. Daily Benefit Amount
Most LTCi policies pay a daily benefit from $50 to $250, based on the amount of coverage you purchased and the type of care you receive. Any charges above the daily benefit amount will not be covered.
2. Elimination or Waiting Period
Elimination or waiting period is the length of time between the day you started receiving LTC services and the day your policy starts to pay your benefits.
You will have to pay for any long-term care you receive within the waiting period. Elimination periods are offered from 0 to 180 days.
3. Maximum Policy Benefit
LTCi policies have a benefit limit, which could be the maximum dollar amount or period of time which LTC benefits will be paid. After buying a policy, you can decide getting a benefit period ranging from a fixed number of years or one that lasts the remainder of your life.
Some LTCi policies allow the conversion of the benefit time periods into dollar amounts but not limit the number of days they will pay for LTC services.
4. Pre-Existing Condition Limitation
Pre-existing condition limitation is the period of time (commonly six months) after you purchased the policy that: benefits are not going to be paid for any care related to the pre-existing condition.
Other policies only apply a pre-existing condition limitation for medical conditions that were not disclosed on application.
Virtually all long-term care policies have specific exclusions and these may include:
• Mental and nervous disorders, except for organic brain conditions such as Alzheimer’s disease and senile dementia
• Attempted suicide or self inflicted injuries
• Drug and alcohol addiction
• Treatment already paid for by the government
5. Inflation Protection
It is common for most long-term care insurance policies to include inflation protection, which each year increases the amount of the daily benefit amount, based on the level of inflation.
Inflation protection is commonly offered as an option benefit, but it necessary to increase your monthly premium and for the policy to continue to afford your care expenses.
Getting LTCi will protect you from being unable to afford care, especially when you need it. However, you have to be sure that you understand the benefits that your policy comes with. Buying LTCi is one thing but maximizing its benefits is another, which you would definitely want to do.