Long-Term Care Insurance For Seniors

To cover the potential of incurring the high cost of long-term care, many seniors consider purchasing long-term-care insurance. Long-term care insurance (LTC) is not cheap but it can be a lifesaver. A good place to start your research on long-term care policy is by checking out the Consumer Reports analysis of the long-term-care policy options and criteria for determining which policy choice is right for you.

What is long-term-care insurance for seniors?

Long-term-care insurance for seniors covers services for people who are unable to care for themselves because of a prolonged illness, a degenerative condition, a disability or Alzheimer’s or similar condition. Generally long-term care insurance will cover custodial or personal care at home or skilled nursing care or rehabilitation at home or in a nursing or assisted care facility.

Long-term-care insurance can cost between a few hundred dollars a year to over $10,000 a year, depending upon the type of coverage you purchase and your age and health at the time you purchase the insurance.

When should you buy long-term-care insurance for seniors?

Many insurance companies recommend purchasing a long-term-care policy anytime after age 50. Consumer Reports suggest you wait until age 65 unless you have a chronic disease or history of illness in your family. After age 65, the long-term care premiums are higher, and, you run the risk of not passing the medical tests. Once you are diagnosed with a serious condition that may require long-term care, you will not be able to get a long-term-care insurance policy.

Who should purchase long-term-care insurance?

Anyone who is currently healthy and wants to protect assets and does not have sufficient saving to cover the costs of long-term care should consider the purchase of a long-term care policy.

Once you purchase a policy the rate is typically locked in for the life of the policy and the policy is generally good as long as you pay the premiums.

What should I consider when selecting a long-term-care insurance policy?
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Look for stable insurers that have been in long-term-care insurance business for a long time. Review the coverage the insurer offers carefully. Long-term care policies can have many exclusions and requirements that make it difficult to obtain the coverage when you place a claim. Some of the less expensive policies may cover nothing more than you are eligible for with Medicaid.

Some of the features you may want to consider include:

• Look for a flexible policy that covers alternate plans of care including home based care not just skilled nursing home care.
• Make sure there are no excluded conditions such as Alzheimer’s or Parkinson’s.
• Determine the maximum amount the policy will pay per day and how that amount is calculated.
• Determine the length of benefit period you can afford. The average nursing home stay is 2 1/2 years. You generally can select a benefit period of between 2 years and an unlimited number of years. The longer the benefit period the higher the premium you can expect to pay.
• Choose how soon you want the payments to begin after you become eligible. Usually the waiting period is between zero and ninety days. The longer the waiting period the lower your premiums will be.
• Consider adding an inflation adjustment to your policy. Inflation adjustments are expensive but nice to have if you can afford to add one to your policy.

How do I evaluate which insurance company to choose?

Because you may not need your long-term care policy until years after you purchase the policy the most important choice you will make is choosing a company that is stable and will be around to make good on the policy when you need the insurance. Look at the company’s financial strength and their rating with the major rating services.

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