Long-term care insurance provides you with the peace of mind that you will be looked after if you are ever unable to care for yourself as the result of injury or illness. While medical insurance will pay for the cost of treatment, coverage will normally only last until the condition has been stabilized. At that point, you will be required to pay for further care or to ask your family members to care for you. Finding the right policy for you or your partner isn't as easy as you might imagine. The following steps outline how you should shop sensibly for long-term care insurance.
Identify the need for coverage
Long-term care insurance is often an expensive commitment, with costly premiums to be paid over a considerable period of time. The National Association of Insurance Commissioners (NAIC) points out a number of factors you should take into consideration when deciding whether to take out insurance. Your age, life expectancy and gender have a significant impact on the cost of premiums. For example, women have a longer life expectancy on average and often outlive their husbands.
It's also important to consider the level of your income and the value of your assets. A long-term care policy could protect you if you have significant assets. If not, it might not be a wise investment, as it is likely that you will be eligible for Medicaid. NAIC recommends that you spend no more than 5 percent of your income on a long-term care policy.
Understand the types of policies
If you decide that coverage is appropriate to your needs, it is vital to understand the types of policies available. Some companies offer group policies that have less-stringent rules regarding the member's medical history than an individual policy might. This makes it easier to get coverage if you have any pre-existing conditions. The downside of group policies is that they sometimes offer reduced benefits and can be more expensive than other policies. If you take out a policy at a relatively young age or are very healthy, then an individual policy might be more suitable.
Identify the level of coverage
When considering a policy, it is vital to compare the different benefits in addition to the overall cost. A policy might appear significantly cheaper than others, but that could be reflected in reduced benefits. Look into details, such as how long the disability period must last before you are covered. You should also identify how long the benefit lasts after it commences and exactly what is covered. Benefits might include coverage for nursing home care, home-health care and the costs of assisted living. Check which conditions are covered and which are excluded. Be sure to find out who determines whether you are eligible for a benefit.
The NAIC suggests that certain terms are critical. Your policy should include at least one full year of nursing home or health-care coverage. Eligible conditions should include Alzheimer's disease. The insurance should include protection against inflation and should include a guarantee that the policy cannot be terminated if your health deteriorates or if you reach a certain age. There should be no requirement that you be hospitalized first to receive any benefits.
Choose the right insurance company
It is important to choose a policy through an insurance company that has a good reputation and history. You can review an insurer's history with your state insurance commissioner's office. Look for an insurer that is well-established and that has been operating for as many years as possible. Identify any history of complaints and how often the company increases its rates. Overall, you should look for an insurer that has a financial rating of AAA.
Long-term care insurance can protect you against the risk of having nobody to care for you if you find yourself ill or impaired in later life. Weigh all the issues carefully, and make sure you know how to shop for the right policy.