Long-Term Care Insurance - LTC Insurance

Long-Term Care Insurance

The aging of America is one of the biggest factors contributing to the growing interest in long-term care (LTC) insurance.

According to U.S. Census Bureau data, the median age in America has been rising and the last of the 76 million Baby Boomers will reach age 65 by 2030 -- doubling the elderly population in America.

The U.S. Department of Health and Human Services estimates that about 40% of people aged 65 or older have at least a 50% lifetime risk of entering a nursing home.

For its part, the Health Insurance Association of America estimates that by 2020, 12 million people may require long-term care.

At a time when the average cost of a private room at a nursing home tops $74,000 a year, long-term care insurance can be a solid investment for individuals who have assets they want to protect or who want to avoid becoming a financial burden to their family. But unlike other types of insurance, in which policies are standardized or fairly straightforward, long-term care policies are complex and vary widely. Virtually every company's policy differs on such matters as who qualifies for coverage, when the policyholder can begin receiving benefits, the amount of coverage, the term of the policy, and premium costs.

Before you begin comparing policies on a feature-by-feature basis, it is important to understand some of the basics.

What Long-Term Care Insurance Is -- And Is Not

Long-Term Care Insurance--is not life insurance, disability insurance, or health insurance.
Instead, LTC includes a range of nursing, social, and rehabilitative services for people who need ongoing assistance due to a chronic illness or disability.
LTC insurance can be used by anyone at any age who suffers an accident or debilitating illness, but it's most frequently used by older adults who need assistance with essential physical needs, such as bathing, dressing, or eating.
For the most part, those who need long-term care are left to foot the bill on their own.
Neither Medicare, nor Medicare supplemental coverage, also known as Medigap insurance, nor standard health insurance policies fully cover long-term care.
That leaves most of us with two options when faced with such expenses: pay out-of-pocket or rely on private long-term care insurance.
Most LTC policies are "expense-incurred" or indemnity policies, which pay a fixed-dollar amount toward the cost of daily care.
Policies tend to cover a variety of care settings, including nursing homes, home health care, assisted living facilities, and adult day care.
Since premium costs increase depending on your age at the time of enrollment, the younger you are when you purchase a policy, the lower the premium you'll pay during the life of the plan.
Once you purchase a policy, premiums generally remain the same each year, so experts recommend that individuals start thinking about long-term care long before they need it.
Because long term care insurance premiums are based on age at the time of purchase, the younger you are when you purchase a policy, the less expensive it typically will be.

Long-Term Care Insurance--Shopping for Long-Term Care Insurance: Consumer Guidelines
When shopping for long-term care insurance make sure you take your time and compare the features of several policies.
State insurance regulators and the American Council of Life Insurance, and the Amermican Health Care Association recommend that you pay special attention to the following features.

Long-Term Care Insurance--Company Reputation and Legitimacy
Make sure the insurance companies under consideration are licensed in your state and that they carry favorable financial ratings from well-known ratings agencies such as A.M. Best Company, Duff amp; Phelps, Inc., Standard and Poor's Insurance Rating Services, and Moody's Investor Services, Inc.

Long-Term Care Insurance--Coverage Parameters.
Policies will differ in the types of services they support.
Some cover nursing home care, others cover custodial or personal care in a variety of settings such as assisted living, adult day care, and home health care.
Some include a combination of services.
Be sure to choose a policy that best meets your particular needs.

Long-Term Care Insurance--Benefits Payout.

How much does the policy pay per day for care in a particular setting (e.g., nursing home, assisted living)? How does the policy pay out services (e.g., a fixed daily amount, as reimbursement for the cost of care up to a daily maximum)? Does the policy have a maximum lifetime limit? If so, what is it for nursing home care? Home health care?

Long-Term Care Insurance--Waiting Period.

How long must the insured wait before he or she can begin receiving benefits? Most policies range from zero to 180 days.
Typically the longer the period, the lower the cost of the policy.

Long-Term Care Insurance--Eligibility.

Does the policy use certain benefit triggers to determine when you will be eligible to receive benefits? Such triggers could include activities of daily living that the insured needs help with, such as bathing, eating, and dressing; cognitive impairment, such as Alzheimer's disease; or a prerequisite hospital stay for nursing home benefits.

Long-Term Care Insurance--Benefits Protection.

The policy should include an inflation adjustment feature to ensure that benefits stay in line with rising care costs.
Determine what the rate of increase is, how often it is applied, and for how long.

Additional protections include a "guaranteed renewable" clause, which states that the policy cannot be canceled when you get older or if you suffer physical or mental deterioration, and a nonforfeiture benefit, which ensures that some portion of your benefits are still available to you if you cancel your policy or unintentionally let it lapse.

Long-Term Care Insurance--Tax Implications.

Most long-term care policies sold today are federally tax-qualified, which means premiums paid, as well as out-of-pocket expenses for long-term care, can be applied toward the 7.5% medical expense deductions contained in the federal tax code.

Additionally, long-term care benefits received are not taxed as income up to certain limits. Consult with a tax advisor to learn more about the tax implications of long-term care insurance.

Because of the many variables involved in determining whether long-term care coverage is right for you, it is important to do your research. Luckily there is a wealth of information available to consumers on long-term care and related health care issues

NEXT ARTICLE WE WILL LEARN ABOUT: Auto Insurance ......

Rate Article

Related Videos
Play Video Beat The Bean Counters	Play Video How to Care for Grevillea Noel	Play Video Long-Term Care Insurance	Play Video How Should Society Care for the Elderly?	Play Video Major Types of Insurance for Medical and Rehab

Listed below are more articles related to the above article from the "Insurance" article category.

People interested in the above article "Long-Term Care Insurance - LTC Insurance" are also interested in the related articles listed below:

 

Save Time By Buying Cheap Insurance Online From The Net!

A car has become one of the numerous things without which we cannot do any longer. However, with the number of vehicles that ply on the roads, increasing by hundreds with each passing day, the number of accidents and unintentional damages caused to other vehicles has also increased tremendously.

Cheap Insurance Online: Big on Performance, Easy on Pocket

The car today is no longer considered as a luxury. It has become a necessary item for people especially in the advanced countries of Europe and North America. However with the recession hitting hard on the face, many people are forced to cut their cost of living.

Protecting your Wedding: A Piece of Cake

Cutting the cake can be one of the most anticipated moments of a wedding. After you've exchanged rings and said your vows, what better way to celebrate your wedding than sharing those beautiful tiers of sweetness with all your guests?

Sine-qua-non: Long Term Care Insurance

No one ever wanted to encounter losing the ability to care for ones self. If there was one thing that one could wish away, it would be the unforeseen financial and personal risks and the exorbitant cost of Long-term care (LTC).

Know All About The Workers Compensation Insurance

Intego is a nationwide, experienced, specialized, and focused agency. We offer the finest industry products using the most sophisticated web-based technology and back them with unparalleled customer service. Let us show you how this powerful combination can improve your business process-giving you more time to build your business and keep your customers happy.

The Importance of Insurance Coverage for Young People

Debt reduction law centers appear to be on a relatively better position than insurance companies especially with the ongoing recession. When it comes to finances at this day and age, being young and single often means there's a huge possibility that you are preoccupied about getting rid of your debt or saving your home rather than thinking about your insurance coverage. This is often due to a widespread belief that right now, insurance is one of a young person's least important concerns and that it is not quite practical to acquire it in the middle of an economic crisis.

Wedding and Events Insurance or Provides Piece of Mind

Planning a wedding is something lots of girls start thinking about from a very early age! But one thing most little girls don't think about, when doodling their dream wedding dress, is insurance. Wedding insurance is perhaps not the most exciting things happy couples have to think about in the lead-up to their wedding but since weddings can cost between •£15,000 and •£25,000, it's an important to detail to work into your plan.