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Features
It is important that
you understand the various features of your
long-term care policy. While they may differ from
policy to policy, many offer the same features. The
two basic types of long-term care plans are
comprehensive plans and non-comprehensive plans.
Comprehensive Plans cover care at all levels
including Nursing Home care, Home Health care and
Assisted Living. Non comprehensive plans cover care
either in a nursing home or at home, but not both.
Daily Benefit
Choosing a daily benefit that meets your needs will
be one of the first decisions you will have to make.
The cost of care varies from state to state, so
first consider where you will live when you are most
lively to receive care and research costs in that
area. In Washington, long-term care insurance is
bought in $10 increments beginning at $40 per day
and on up to $300 per day. The cost of care in
Washington is averaging about $160 per day. The more
coverage that is purchased, the higher the premium
will be.
Maximum benefit period
The maximum benefit period will be your next
consideration. This feature is the number of years
you want your coverage to last if you need care. In
general, your options are 1 through 5 or 6 years, or
lifetime coverage. Policies with larger maximum
benefit periods will cost more.
Inflation protection
The third consideration is whether to include
inflation protection or not. While plans vary, most
will offer a choice of 5% compound inflation, 5%
simple inflation, or no inflation. Inflation
protection is one of the most important additions
you can make to a long-term care policy. Simply put,
this rider automatically increases your daily
benefit amount each year, keeping your policy
up-to-date with inflationary trends. Watch out for
companies who market a future purchase option as
inflation protection. Over time this can become
very costly. Be careful to purchase an age
appropriate option. Purchasing no inflation
protection at a young age can have devastating
consequences.
Elimination period
The fourth decision is whether of not you want a
deductible or elimination period. The elimination
period is the period of time you have to wait before
you receive benefits. During the elimination period,
the policy will not pay for long-term care services.
Options range from 0-day, 7-day,20-day, 30-day,
50-day, 60-day, 90-day, 100-day, 180-day and 365-day
elimination periods. It is our recommendation that
you do not consider anything over a 100-day
elimination period. With many companies lengthy
elimination periods may not offer the cost savings
most would expect.
Where long term-care is provided
Long-term care can be provided in a number of
different settings. Choices are available depending
on the level of care needed to maintain a safe,
healthy environment.
Home Care:
Assistance can be provided in your home to help you
manage and maintain your household activities so
that you to remain safe in your home. Services for
occupational, physical, respiratory, speech therapy,
nursing care, social worker, or home health aide are
typically included in a home care benefit. Also
included are medical, social worker, home health
aide, and homemaker services. Many also include
homemaker and chore services.
Policies will differ in how care must be provided.
Some policies state that care must be provided
through a Home Health Care Agency while others allow
licensed, independent caregivers. Still others
allow family and friends to be caregivers.
Assisted Living:
This is a residential living arrangement that
provides individualized personal care and health
services for people who require assistance with
activities of daily living. This is the fastest
growing design for long-term care services,
providing for housekeeping and meals, social
activities, personal care and monitoring, as well as
medical monitoring.
Nursing Home:
A facility that provides room and board and a
planned, continuous medical treatment program,
including 24-hour care, 7-days a week. Care can be
skilled nursing care, personal care or custodial
care. This care more closely resembles institutional
or a hospital-like setting.
Other Special Policy Features
· Waiver of Premium - This option waives the premium
payment while benefits are being paid to you on your
behalf.
· Restoration of Benefits - This option gives you a
way to keep the maximum amount of your original
benefit even after your policy has paid you
benefits. In most policies, if you recover from
needing benefits for 180 days, your benefits restore
to the original amount you purchased.
· Guarantee Renewable - This provision means the
insurance company cannot change the coverage or
refuse to renew the coverage for other than
nonpayment of premiums.
· Survivorship - This benefit will allow for a
surviving spouse to have a paid-up policy upon the
death of his/her spouse if the policy has been in
force for the stated number of years and no benefits
have been used.
· Spouse discounts - Most companies allow for a
spouse discount when both spouses apply for coverage
with the same company.
· Married discounts - Some companies allow for a
discount if the person applying is married and may
also apply this discount regardless if the spouse is
applying for coverage or not.
· Preferred health discount - Companies allow for a
varying degree of discounts due to good health.
· Guaranteed rates - Some companies have a
guaranteed period of time that rates will not be
increased for any reason.
· Third Party Designation - This benefit lets you
name someone who the insurance company can contact
if your coverage is about to end due to lack of
premium payment. This can be a relative, friend, or
professional such as a lawyer or tax advisor.
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