Long-term Care Insurance Explained: What It Is, Types of LTCI Policies & What to Consider
For long-term care, health insurance is vital, and LTCI (or Long-Term Care Insurance) can be an effective tool for protecting your estate and assets from the high costs of senior care. The best long-term care insurance should cover a lot of care solutions and even if you don’t think you need it now, it is always best to get LTCI early on. Though the average nursing homes length of stay is consistently higher than most people would believe, 2.4 years according to a report conducted by the National Center for Health Statistics, less than 20% of long-term care is home care, nursing home care, home health care, adult day care, assisted living facility care and others consitute the overwhelming majority of senior care services. Generally, the people who are in need of care are responsible for paying the costs. Long Term Care is usually not covered by your personal health insurance plan or by the policy you may currently have from a present or previous employer. Medicare usually pays for only a small percentage of skilled nursing costs, while Medicaid provides health care coverage to Americans with lower incomes and can pay almost half of all nursing home costs.
Though it is likely that you will need long-term care in the future, no one can predict the kind of care that may be needed or what are the exact costs involved. With Long-Term Care Insurance, you can budget and plan for a quantible and known premium for a policy that can protect you from potentially large out-of-pocket expenses. It is very important and useful to learn about the different types of long-term care health insurance policies available to you in order to match the most appropriate policy to suit your needs.
Types of Long-Term Care Health Insurance Policies: Some of the most commone type is indemnity which pays a maximum fixed benefit. A benefit amount is selected at the time the policy is issued and actual expenses, up to a fixed predetermined dollar amount, are reimbursed as they are incurred. Also, integrated policies that give benefits are now becoming more popular today. The provisions allow for a total dollar amount that may be used for various long-term care services with expense limits on a daily, whether monthly or weekly basics.
Because of the rapid increase in long term costs, most long-term care health insurance policies offer inflation adjustments to help offset high anticipated future costs. Take note that long term care insurance policies only take effect when an individual is unable to perform activities of daily living or becomes cognitively impaired from dementia or related illnesses. Home care services such as skilled and unskilled nursing care, physical therapy and home health aide support provided by licensed agencies are generally covered as are skilled, intermediate and custodial care services provided in licensed nursing facilities. It should be noted that if any conditions are preexisting, all benefits are denied when care is needed within six months of the policy’s issue date for that condition.
What to Consider When Selecting the Best Long-Term Care Insurance: Nowadays, there are now over 100 LTCI products. Before selecting a long-term care health insurance provider and policy, please consider the following: Verify that the insurance agent is licensed to sell long-term care health insurance in your state and review ratings to ensure that the insurance provider is financially secure since you will likely need the policy for years to come. Also, remember to determine exactly which services are covered, e.g., skilled nursing home care, unskilled nursing facility care, home health care, adult day care, etc. in order to select the best long-term care insurance policy. Examine the length of time benefits are provided for the various types of services covered; look for maximum lifetime benefit amounts.
Remember to identify the length of time before pre-existing conditions are covered. Find out how long you must wait before benefits begin for services. Inquire regarding coverage of Alzheimer’s and other related illnesses, the best long-term care insurance provider should allow for this. Review any premium provision waivers. Analyze cost requirements to make sure your ability to make policy payments during retirement years. As with all complex and important decisions, you can talk to relatives and friends to get recommendations on the best long-term care insurance and share experiences regarding various policies, review all paperwork, with the consultation of your attorney if needed, to ensure that you understand policy provisions and discuss economic implications with your financial advisor.
Posted in Healthcare Professionals, Healthcare Services