10 Questions to Ask Before Buying Long-Term Care Insurance

  1. Does the policy include protection against inflation? This is an important feature, without it your policy will be worth very little when you need it.
  2. Does the policy guarantee that premiums remain level?  The company should guarantee that it will charge you the same as other policy holders of the same age, however, the premiums can still be raised for that age group across-the-board.  Some policies will guarantee that the rate will not change for a specific period of time.
  3. Does the policy cover home health care benefits and all levels of nursing home care, including skilled, intermediate and custodial care? Find out how the policy will cover each of these types of care, the benefit amount for each and how long benefits will last.
  4. Does it provide comprehensive benefits for both home care and nursing home care?  Make sure that the policy covers less severe impairments and allows you to stay in your own home.
  5. Is the maximum benefit period one year or more? The maximum benefit period varies widely.  Choose coverage for the maximum number of days or amount of benefits that you can afford, but at least one year of care.
  6. Is the policy renewal guaranteed? Choose a policy that guarantees that you can renew if you pay the premiums on time regardless of your health or age.
  7. Is the deductible affordable and does the policy have a waiting period of 100 days or less?  Most policies require that you pay for needed care from your own money for a certain number of days before coverage starts.  Find out what the rules are and decide if this will be feasible for you.
  8. Will the policy cover dementia if an individual is diagnosed down the road?  Many policies cover conditions like Alzheimer’s and it is important to ask this question.  Dementia is a common cause of nursing home admissions.
  9. Will you be able to keep up with the policy premiums?  Important provisions, such as inflation protection and nonforfeiture increase the cost of the benefit.  A nonforfeiture benefit ensures that even if you cancel your policy or stop paying premiums, you will still receive some part of your benefits.  Your premium should not be more than 7% of your income when you buy the policy.
  10. Have you learned as much as you can about the insurance company? Try to pick a company that is financially sound and has a good reputation.

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