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    13

    Long Term Care Insurance Buyer’s Guide

    Deciding to purchase a long-term care insurance policy is easier with a long term care insurance buyer’s guide. It is easy to compare the benefits, including a wide range of care options that will cover your future needs.

    You need to keep the balance between the monthly premium and the type and amount of services you decide to be covered as well as any benefit restrictions or exclusions.

     

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    Long Term Care Insurance Benefits You Should Consider

     

    1. Daily Benefit Amount

    Most LTCi policies pay a daily benefit from $50 to $250, based on the amount of coverage you purchased and the type of care you receive. Any charges above the daily benefit amount will not be covered.

     

    1. Elimination or Waiting Period

    Elimination or waiting period is the length of time between the day you started receiving long term care services and the day your policy starts to pay your benefits.

    You will have to pay for any long term care you receive within the waiting period. Elimination periods are offered from 0 to 180 days.

     

    1. Maximum Policy Benefit

    Long term care insurance policies have a benefit limit, which could be the maximum dollar amount or period which benefits will be paid. After buying a policy, you can decide to get a benefit period ranging from a fixed number of years or one that lasts the remainder of your life.

    Some policies allow the conversion of the benefit time periods into dollar amounts but not limit the number of days they will pay for long term care.

     

    1. Pre-Existing Condition Limitation

    Pre-existing condition limitation is the period (commonly six months) after you purchased the policy that: benefits are not going to be paid for any care related to the pre-existing condition.

    Other policies only apply a pre-existing condition limitation for medical conditions that were not disclosed on the application.

    Virtually all long term care insurance policies have specific exclusions, and these may include:

    • Mental and nervous disorders, except for organic brain conditions such as Alzheimer’s disease and senile dementia.
    • Attempted suicide or self-inflicted injuries.
    • Drug and alcohol addiction.
    • Treatment already paid for by the government

     

    1. Inflation Protection

    It is common for most long term care insurance policies to include inflation protection, which each year increases the amount of the daily benefit amount, based on the level of inflation.

     

    long term care insurance inflation graph

     

    Inflation protection is commonly offered as an option benefit, but it necessary to increase your monthly premium and for the policy to continue to afford your care expenses.

    Different Types of Long Term Care Insurance Inflation Protection

    1. Simple Inflation Protection – It is interest on the daily benefit only. This is perfect for people who are in their 60’s or 70’s.

     

    1. Compound Inflation Protection – It is interest on interest. It has a massive effect in increasing your benefits because of its fast pace compared to simple interest. This is perfect for individuals who are in their 40’s, 50’s and 60’s.

     

    1. CPI Compound Inflation Protection – Your benefits will increase according to the annual increase in the Consumer Price Index.

     

    Getting long term care insurance will protect you from being unable to afford care, especially when you need it. However, make sure that you understand the benefits that your policy comes with through a comprehensive buyer’s guide. Buying a policy is one thing but maximizing its benefits to your needs is another, which you would definitely want to have.

    Long Term Care Insurance Buyer's Guide
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