How to Find the Best Long Term Care Insurance Policy

Will the Policy You Can Afford, Give You the Protection You Need?

Long term care health insurance policies are expensive with hundreds of potential variables such as age, inflation protection and so on.

It is likely that you will find an affordable long term care insurance policy. But, how do you know which policy features are important and which will you need? Will the policy you can afford, give you the protection you need?

Outlined below are a few key issues to consider when evaluating long-term health care insurance policies and making a long term care health insurance comparison. If you opt for a long term care insurance policy, read the fine print and understand exactly how your insurer will determine your eligibility for coverage under your policy.

Your best bet is to learn more about long term care health insurance (see below) and then get long term care quotes on policies that offer exactly what you want. (Click here to hear from a long term care health insurance expert.)

A Reputable and Financially Sound Insurer

With a long term care insurance policy, you don’t know how long you will hold the policy before you actually need to use it. Therefore, you should purchase insurance from an insurer who is highly reputable – someone who will still be in business if you ever need to make a claim against your policy.

In general, you should select an insurer who has a high rating from a rating agency like A.M. Best, Moody’s or Standard & Poor’s. (www.ambest.com; www.moodys.com; www.standardandpoors.com)

Daily Benefit Amount

The typical long term care insurance policy pays a fixed daily benefit. The amount of this daily benefit is among the most important variables of a long term care insurance policy.

It can be difficult to decide how much coverage you need – as there is great variance on the costs of different kinds of long term health care. You should review the average costs of care for where you expect to be located when you might need care.

Benefit Period

While insurers do offer long term care insurance plans that cover long term care for your lifetime, most people can not afford the premiums of this type of long term care plan.

You may wish to consider purchasing a specified benefit period -- from one to six years. As a benchmark, the majority of patients requiring long term health care only use the service for four years or less.

Elimination Period

The typical long term care insurance policy also has an elimination period. The insurer will only provide benefits after the policyholder has received services for a number of days, which have been specified in advance. Therefore, the policyholder must pay for the care themselves – out of their own pocket -- during that elimination period.

An elimination period can range from none to 100 days. The longer elimination period you choose for your policy, the less expensive your monthly premiums will be. However, 100 days of long term care could cost you tens of thousand of dollars.

How the Long Term Care Insurance Providers Decide When Benefits Will Be Awarded – Benefit Trigger

You, your family or your doctor may believe that you require long term care. However, it is the insurer who decides whether or not they will pay for this care.

Unfortunately, even some of the best long term care insurance providers have very rigid rules about how you can use the policy.

Insurers will not pay for your care unless you are unable to perform a specified number of activities. The industry calls these "activities of daily living” (ADLs) and they include: bathing, dressing, eating, getting from a bed to a chair, remaining continent, using a toilet, and walking.

Long term care plans can vary by the number of “activities of daily living” you've lost that they will cover. For example, the long term care insurance cost for a policy that covers you if you are unable to perform just one “activity of daily living” is going to be much more expensive than one that covers you only if you have lost the ability to do all five.

In some long term care plans, severe cognitive impairment as a result of a degenerative brain disease like Alzheimer’s or a “medical necessity”, as might be the case if you have congestive heart failure, may or may not be covered by each of the different plans.

How and Where the Long Term Care Services Are Delivered

It is generally recommended that you find the most flexible policy you can afford. Ideally, you find a long term care insurance policy that will cover care in your own home. But it is most important that the policy cover both nursing home care and assisted living. Other types of care to consider in evaluating the long term care insurance cost are: adult day care, hospice services and temporary overnight care.

Inflation Protection

It is likely that you will not use your long term care insurance policy in the near-term. Although adding inflation protection will increase the long term care insurance cost, it is critical for effective asset protection planning that your benefits increase along with the rapidly increasing costs of healthcare.