| Long term care is a pressing issue. With the economy | | | | under the age of 70, considerate least 5 years, but |
| ailing and millions of baby-boomers entering | | | | purchase what you can afford. The best long-term |
| retirement, insurance for long term care is on many | | | | care plan is the one that is in force when you need it. |
| peoples mind. Understanding what determines the | | | | 3. Elimination Period (deductible): Most people choose |
| cost of long term care insurance will help save | | | | a waiting period of 90 days or less. The longer the |
| money in the end. The New York Times again | | | | waiting period, the lower the premium. With the |
| published a story about long term care recently, this | | | | costs of care tripling over the next twenty years, |
| one in regards to falling home prices and the effect | | | | the difference you might save in premium may not |
| this is having on those who were planning on selling | | | | justify having to pay the first three months |
| their homes to pay for long term care in assisted | | | | out-of-pocket. Recommendation: 60 or90-day |
| living facilities. The problem is, home prices have fallen | | | | elimination period. |
| so far these folks don't have the income to cover | | | | 4. Home Health & Community Coverage: Most view a |
| the high cost of assisted living. | | | | nursing home as your last resort, so be sure you |
| No one will argue the cost of long term care is low, | | | | have excellent home and community coverage. This |
| so planning for the inevitable may relieve some of | | | | benefit may be the very thing that keeps you out of |
| the stress of having to cover these high costs. | | | | the nursing home. With some policies this is a rider |
| Insurance for long term care is an option that will in | | | | you can add and with others it is automatically |
| the long run, cover a significant portion of long term | | | | included. Benefits are a percentage of your nursing |
| care. Understanding how this type of insurance works | | | | home benefit, for example, 50%, 80%, or 100%. |
| though is very important. | | | | Recommendation: At least 80%, preferably 100% of |
| Here are 5 factors, with recommendations, to help | | | | the daily benefit. |
| simplify the benefit selection process. Each of these | | | | 5. Inflation Protection: It is important to address |
| decisions can impact the policy premiums. | | | | inflation protection within your policy. According to |
| | | | the General Accounting Office, long-term care costs |
| 1. Daily or Monthly Benefit: Look at the average cost | | | | are growing at 5.8% annually and are projected to |
| of care in your area and choose the benefit to | | | | triple in 20 years! Make sure the benefits are as good |
| closely match that cost. This is the daily benefit | | | | in the future as they are today. Recommendation: If |
| available for facility care. Purchase the highest benefit | | | | you are under age 70, purchase inflation at 5% |
| you can afford because health care inflation costs will | | | | compounded annually. (Benefit doubles in 14.4 years) |
| erode your daily benefit. Recommendation: Purchase | | | | Ages 70 - 74, you can purchase 5%simple inflation |
| close to the private room rate in your area. If you | | | | (Benefit doubles in 20 years.) Ages 75 and over, you |
| choose to self-insure some of the cost, purchase at | | | | can purchase a higher daily or monthly benefit and |
| least 70% - 80% of the private room rate. | | | | build in inflation protection immediately or use a |
| 2. Benefit Period: How long will the policy pay | | | | Guaranteed Purchase Option that allows you to buy |
| benefits? Benefit periods are available from1year to | | | | up additional daily benefit without proving |
| lifetime. Choose at least a three-year benefit, | | | | insurability.Understanding how long term care |
| preferably a six-year benefit. The ideal plan is lifetime | | | | insurance policies work will reap rewards in the future. |
| because you never have to be concerned about | | | | Contact a licensed LTCI representative to help you |
| outliving your benefits. Recommendation: If you are | | | | decide if long term care is right for you. |