Experts estimate that at least one of every two Americans will require some sort of long term medical care at some point in their lives. How you pay for this care is something you should consider now, before you need it, and for many people purchasing a long term care insurance policy helps guarantee peace of mind.

But how do you choose a long term care insurance policy? Purchasing any kind of insurance can be uncomfortable for many people, but purchasing long term care insurance might be harder because it forces you to consider many important decisions that you’ve never faced before

Long term care insurance, may cover your daily in-home or nursing care needs in the event you need it. You might get injured and require long term care, or suffer a long term illness. As you age, you might simply need help with daily tasks either at your home or in a nursing home. This type of long term care can be expensive, prohibitively so for many people, but for those that need to use their coverage, long term care insurance can prove to be invaluable.

So how do you choose a long term care insurance policy?

First, consider the insurance company. Since it could be many years or decades before you need your benefits, make sure the company you choose has been around for some time and will reliably be around when you need it. Be sure to check their Best rating for financial soundness.

Consider some details of the insurance policy. How long of an elimination period do you want? An elimination period is how long you will pay your expenses out of pocket before your insurance company will start paying your expenses. When purchasing a long term care insurance policy the choices are generally 90 days, 60 days or 0 days. You can choose to have an inflation adjustment option. You also have the choice of the length of coverage. The average length of a nursing home stay is 2.5 years, so you can choose the average length of stay for coverage, or some other coverage period. It might be an unlimited number of years, or you might choose just 2 years, or as many as 5. This is an important determination in choosing your insurance. Balance the costs and risks of outliving your long term care insurance carefully.

Another choice you might make when purchasing long term care insurance is how long your insurance company will provide coverage overall (a set number of years or for an unlimited period of time).

Finally, think where you might get care. Make sure the policy will cover all types of care, whether provided in a skilled nursing facility, a nursing home or in your own home.

It’s important to consider the various options when purchasing long term care insurance. Be sure to read the policy to understand the benefits and limitations of the coverage and its cost. Any insurance agent you are working with can also help with questions you have about purchasing a long term care insurance policy.

Visit Long Term Care Guide to learn more.

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You may feel that this is not something that you need, and maybe because of your age, you see it as frivolous. The sad part is that many people feel that way, and they don’t look to the future or think anything bad is going to happen to them. Sadly, these are the ones who find themselves needing long-term care that goes beyond what their insurance company is willing to pay. For them, long-term care insurance would have made things much easier.

The problem with thinking we are “too young” to be thinking about long term care insurance is that it doesn’t always happen to the old - it can happen to anyone. In 2003, the former lead singer of a musical band who was close to 60 at that time and in quite good health took a fall across a fence at his home, breaking several vertebrae in his neck. He is still in the rehabilitation hospital, and it is uncertain when he will be able to return to his home. When that happens, full-time nursing care will still be needed as he is paralyzed from the diaphragm down. A man in good health who just happened to have a freak accident! It can happen to anyone at any age, and you have to be prepared for that. Having long term care insurance is certainly much better than having to worry about how to pay the nursing home or how to pay the nurses that are going to have to come to a patient’s home every day for the rest of his or her life.

Many insurance companies have begun offering long-term care insurance, so more than likely the company you have used for your car, life insurance, and home owner’s insurance offers it as well. It is often advisable to purchase additional insurance from the same company since they tend to offer discounted rates to long-term customers. That doesn’t mean that you shouldn’t obtain several rate quotes, but the first one to consider is your existing company. In addition, many companies now have instant rate quotes over the Internet, though their actual premium may differ slightly for any number of reasons.

There is never a good time to think about long-term care insurance because we don’t want to admit that we may need it. However, the best time is today before there something happens that we do need it. Unfortunately, in our changing world, unusual things happen every day, and you don’t want to find yourself needing long term care for yourself or family member and not have any idea how you re going to pay for it. Get at least five quotes, one from your current insurance company, and make your decision before you need it.

Sandy Sizemore writes on many consumer related topics including health care. You can get a long term care rate quote and learn about buying long term care insurance and more by visiting our health care website.

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1. Buying based on Fear

Although there are cases where an individual may require Long Term Care services for
10 years or more due to Alzheimer’s or other chronic illnesses, these cases are infrequent. Out of $1Billion dollars spent on actual claims by insurance companies over the last 10 years, 98% of all claims were closed in 60 months. 93% of all claims were closed in less than 36 months. If you buy a policy that covers care for 5 years, you will be covering 98% of the statistical risk. Be careful if you do not have the resources to
cover costs over this amount of time. If you buy a Lifetime plan, consider reducing the daily benefit and self insuring part of the cost.
Some companies offer a “Shared Care Rider” that will allow you to borrow benefits from your spouses policy allowing you to save money while still getting a great policy.

2. Buying the lowest price

Some insurance companies may underprice their policies to attract buyers. The price may seem great at the time, but beware of price increases. Some
companies using this strategy have had rate increases as high as 50% in one year. If you buy one of these policies, be sure and add the nonforfeiture option in case you get an unaffordable rate increases in the future and have to cancel. When this happens you may be unable to change companies due to a health change and higher premiums due to your increased age.
Ask your agent how often the company has raised rates on current customers in the past. Also ask if the company can increase the rates on you. If they say NO, kindly ask them if they would put that promise in writing. Guaranteed Renewable does not mean rates will never go up. It is rare that changing companies after a few years is a good thing to do. Proceed with caution when an agent recommends you cancel a current policy for another based solely on price unless you are getting a top rated
carrier with similar benefits.

3. Buying from a “small” company

Top rated high asset based companies are usually the safest to do business with. They have a proven track record. Ask your agent about the size of the company and consider only offers from large companies such as Allianz, Met Life, Prudential, Mass Mutual, Great American, Genworth, John Hancock…Some of these companies have never had a rate increase on existing customers, but they do not guarantee they never will. If you have questionable health, you may only be able to buy from smaller companies willing to take the risk at higher prices or lower benefit levels. (Penn Treaty)
These will probably be priced at higher rates -GULP. It is also advisable to use an agent with access to several of these companies so you can get the best policy/price blend. Rates can vary by as much as $700 per year due to age and health at the time of purchase, so it pays to let your agent shop this business to several companies. (Weiss, Standard and Poor’s, AM Best) are insurance rating companies. Ask your agent for the ratings from these companies and make sure you understand what they mean.

4. Belief that Medicare will cover your 90 day elimination period

Medicare pays the first 20 days of “SKILLED” care after you have been hospitalized. You or your Medicare supplement policy pay over $119 per day(2006) (this copay may go up annually) copay for the next 80 days assuming you are still recieving “skilled” care. Medicare DOES NOT pay for any custodial care. You must be able to pay $130+ per day (varies by state)
or over $12,000 for a 90 day elimination period. Remember this amount increases annually with inflationary pressure. In 20 years this could be $36,000. Be careful when deciding on this feature. You may be able to get a 0, 20, 30, 60, 90, 100, 180 or even 360 day deductible. Cost is higher with fewer days selected but well worth it.

5. Buying nothing if one spouse is uninsurable

Although it seems unfair for an insurance company to decline someone, they are insuring a risk that will eventuually effect as much as 50%+ of the population (New England Journal of Medicine). It is unwise to think you are punishing the insurance company by declining coverage on the healthy spouse. The healthy one today could be the first one to need care tomorrow. Consider adding indemnity benefits to your own policy to make up for the difference.

http://www.robertbscott.com

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