LTCI Explained
Private insurance companies sell LTCI policies to offset the costs of long-term care. LTCI, like all insurance policies, need premiums in order to help recipients avoid paying huge amounts later on in the event of an illness or a catastrophic event. Premiums are based on the individual’s age at the time of purchase and are usually locked in for the life of the policy. LTCI covers the following, depending on the policy you choose:
Care in a skilled nursing facility
Care in an assisted living facility
Buying a LTCI policy gives the policy holder to select from the many options, such as the amount of the daily benefit, the number of years the policy will pay benefits, and, after the applicant qualifies for a policy, the number of days or months before the policy will begin paying benefits. It’s very important to evaluate policies carefully to see which one offers the benefits you require with a premium that fits your budget. Policies differ in their benefits, contract conditions, deductibles and premiums.
It is also a matter of great importance to take into account the rising expense of home care. Be sure the LTCI policy gives inflation protection for benefits to increase as health care costs continue to rise. Policies are generally labeled according to the place in which benefits are paid. Homecare-only policies pay for care at home and in an adult day care or adult day health care facilities. Make sure the policy includes both types of day care. Facility-only policies pay for care in a skilled nursing facility and in an assisted living facility. Comprehensive policies pay for care in a skilled nursing facility, assisted living facility, adult day care or adult day health care facility, and at home. Since LTCI claims are often paid many years after the purchase of the policy, it is imperative to check the following: Financial strength of the company. The industry’s major rating services are A.M. Best , Duff and Phelps, Moody’s, Standard and Poor’s and Weiss Ratings . Reputation and claims-paying history of the company.
Contact your State Insurance Department for information on specific private insurance companies. Check here for more listings information for each of the state’s insurance information. Applicant must be healthy at the time of application Each insurance company has individual requirements and/or limitations Not sure when is the right time to buy an LTCI policy? Or how to assess what you will need from a policy? Visit our Expert Column on Financing Long Term Care to find out more.
Posted in Healthcare Professionals, Healthcare Services