Compare how long your policy will cover the following:
A stay in a nursing home
If you need care at home
4. To determine what you maximum lifetime benefit is, simply multiply your daily benefit times the number of days you are covered. For instance, in the chart below, a policy with a daily benefit of $100 payable for three years will pay out $109,500 in benefits ($100 x 3years=$109,500 – this lifetime benefit is not reflective of inflation increases). Once again, the length of time you choose for your policy and the waiting period have an effect on your maximum lifetime benefit.
What does your policy offer?
For nursing home care $ _________
For home health care $ _________
5. Does the policy have a maximum length of coverage for each period
of confinement?
For nursing home care
For home health care
6. Like many policies that have a wide swath of unknown territory to deal with, such as LTC policies, there is generally a waiting period before the policy kicks in. Because Medicare covers the first one hundred days, many LTC policies do not begin before 90 days. You can request a shorter waiting period but the monthly premium is often prohibitively higher. Ask your agent how long you must wait before a preexisting condition is covered?
7. How long must I wait before benefits begin?
For nursing home care
For home health care
8. In almost all standard policies, Alzheimer's disease and other organic mental and nervous disorders are not covered. That’s not to say you cannot get these coverages added. One of the most difficult aspects of comparing any type of insurance is gathering all of the information about what you require and allowing each policy to stand side-by-side.
Some policies have ingredients that met most but not all of your requirements while some are basic shells that can be added to based on your needs. The later types of policy type additions are called riders. Riders, in insurance parlance, add benefits at an additional cost. Among the most important aspect in an LTC policy is coverage for home health care.
When comparing policies, this should be a standard item unless of course, you live in an area where home health care may not be readily available. In such instances, a home health care option would be the standard by which to judge policies. It can be added later if your circumstances change.
Some policies will offer non-forfeiture benefits – decline them. This type of benefit is costly and unnecessary. It is offered as a rider and will be sold as something that should have been included in the policy. The non-forfeiture rider usually pays some or all of your benefits even if you no longer make premium payments. A certain amount of time must have elapsed first.
Another type of non-forfeiture rider is disguised as a return of premium. This allows you to cancel your policy and receive some of your premium payments back. Disregard such a rider or offers to add it after you have had the policy for a number of years. Often this seems enticing when estate planning is taken into consideration. You may reason that your heirs would get a return on your policy if you never used it or canceled it after a certain amount of time. The unfortunate aspect of this rider is the temptation to cancel the policy at exactly the time in your life when you are most likely to use it.
The last and probably the best rider accounts for inflation. Because the value of today’s dollars will be vastly different than dollars calculated in the future, getting some sort of inflation protection is always a good option. Try to choose an option where this protection is imbedded in the policy. If not, add it.
The question here should be, does your policy cover things like Alzheimer’s or other organic mental diseases?
* Yes
* No
9. Does your policy include inflation protection?
* Yes
* No
10. When you do your side-by-side comparison, have you included all of the possible riders and their cost to the policy?
* Yes
* No
