You Can’t Afford to be Cheap with Long Term Care Insurance

by Michele Postler, Wednesday, December 12, 2012

The good news is that a lot of people are living longer; the bad news is that they may not be able to fund this longer life. If you are in a middle class tax bracket you will not qualify for Medicaid from the government. So you will have to fund the long term care insurance (or LTCI) yourself. Without long term care insurance, it’s extremely possible that this care will either be left to a loved one who may not be able to handle this added responsibility or you will quickly deplete your savings to provide the needed care.
Long term care insurance ratings are highly dependant on the age that you are when you buy the policy, so the younger you are the cheaper your payments will be. The amount you pay should not increase. There are a few main points when purchasing a long term care insurance policy that you should not skimp on, these are mentioned in detail below.


Duration of Stay and Maximum Dollar Amount

Some companies have a maximum amount of days they will cover in a nursing home type facility. The problem with this is that when you are in a nursing home you hope that you will be covered for the amount of time that you need but some policies have a maximum. You should make sure to have this explained in detail when searching for your policy. They also may have a maximum life time payout which again could disrupt the care that you need. Most of the time, policies with longer stays and higher maximums will cost you more while paying for your policy but in the end its worth the extra cost.


Waiver of Premium and Return of Premium

The waiver of premium option is an option that allows you to not pay a certain number of premiums when you need the coverage. You wouldn’t think that you still have to pay for your policy while collecting the benefits but depending on the coverage you receive you may have to. Return of premium is an option that returns a portion of your premium payments if you don’t use the coverage in a specified period of time. This gives you back some of the money you put into the policy. It can help pay for coverage in the future as well as it can be put back into the policy to increase what you may need in the future.


Elimination Period

Most policies have a time period that the owner will have to wait until they start receiving their benefits. This can be from 30 days up to 6 months. The longer you will have to wait to receive your benefits the cheaper the policy is, so make sure that the term is something you can live with. When shopping around for long term insurance quotes make sure the quote includes all of your desired benefits.


The above points are important to understand and make sure you have the correct amount of coverage. If you purchase the wrong policy now it may hurt you in the future. For example, if you only paid for coverage to last you five years in a nursing home, what happens when your coverage runs out is that you have to pay out of your own pocket. This is not the type of worry that you will want at an older age. You can find many companies that offer long term insurance rates online that could give you a rough idea of how much long term care insurance costs.