Questions about long term care insurance coverage -Part One
What is long term care insurance? What is the coverage?
Several types of policies are available. Most are known as "indemnity" or "expense incurred" policies. An indemnity or "per diem" policy pays up to a fixed benefit amount regardless of what you spend. With an expense incurred policy, you choose the benefit amount when you buy the policy and you are reimbursed for actual expenses for services received up to a fixed dollar amount per day, week, or month.
Today, many companies also offer "integrated policies" or policies with "pooled benefits." This type of policy provides a total dollar amount that may be used for different types of long-term care services. There is usually a daily, weekly, or monthly dollar limit for your covered long-term care expenses.
An example of how long term care coverage works:
Say you purchase a policy with a maximum benefit amount of $150,000 of pooled benefits. Under this policy you would have a daily benefit of $150 that would last for 1,000 days if you spend the maximum daily amount on care. If, however, your care costs less, you would receive benefits for more than 1,000 days.
There are no policies that guarantee to cover all expenses fully.
You usually have a choice of daily benefit amounts ranging from $50 to more than $300 per day for nursing home coverage.
Say you purchase a policy with a maximum benefit amount of $150,000 of pooled benefits. Under this policy you would have a daily benefit of $150 that would last for 1,000 days if you spend the maximum daily amount on care. If, however, your care costs less, you would receive benefits for more than 1,000 days.
There are no policies that guarantee to cover all expenses fully.
You usually have a choice of daily benefit amounts ranging from $50 to more than $300 per day for nursing home coverage.
The daily benefit for at-home care may be less than the benefit for nursing home care. It's important to keep in mind that you are responsible for your actual nursing home or home care costs that exceed the daily benefit amount you purchased.
Because the per-day benefit you buy today may not be enough to cover higher costs years from now, most policies offer inflation adjustments. In many policies, for example, the initial benefit amount will increase automatically each year at a specified rate (such as 5 percent) compounded
over the life of the policy.
Some life insurance policies offer long-term care benefits.
With these accelerated or living benefits provisions, under certain circumstances a portion of the life insurance benefit is paid to the policyholder for long-term care services instead of to the beneficiary at the policyholder's death. Some companies make these benefits available to all policyholders; others offer them only to people buying new policies.
Some life insurance policies offer long-term care benefits.
With these accelerated or living benefits provisions, under certain circumstances a portion of the life insurance benefit is paid to the policyholder for long-term care services instead of to the beneficiary at the policyholder's death. Some companies make these benefits available to all policyholders; others offer them only to people buying new policies.
More in this Plain Talk I Need To Know series
(Home) Plain Talk about Long Term Care Insurance
What is Long Term Care?
Will you need long term care, and what are the chances?
How Much Does Long Term Care Cost?
What is Insurance for Long Term care?
Where Do I Buy Long Term Care Insurance?
How Much Does Long Term Care Insurance Cost?
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