By assistedcar22731191, Jan 23 2019 05:05PM
In choosing a policy, there are a dizzying number of decisions, options and fine print legalese which can make selecting the right insurance a very tricky process. Follows is a list of some of the considerations of which potential buyers should be aware:
1) Care Allowance - A care allowance is the amount of money a policy will pay out on a daily or monthly basis. If selecting a care allowance plan, consider how the cost of care may change at some unknown point in the future when the care is required. Inflation is a factor to be consider, and the health care costs are rising a rate much higher than inflation.
2) Deductible - What is the appropriate deductible with consideration to the policyholder's other resources? How might this change in the future? The deductible is how much the policyholder is required to pay out-of-pocket before benefits kick in.
3) Monthly Premium – The premium is much the policyholder must pay each month. What monthly premium can the person afford? Recognize that premiums will increase and it is likely the individual's income will decrease as they age.
4) Elimination Period - The "elimination period” is the number of days the policyholder must require care before benefits begin. What other insurance coverage does the individual have and will those insurance benefits sustain them for the elimination period? For example, most seniors have Medicare which will pay for most of the cost of short-terms stays in nursing homes, but will not pay anything toward assisted living.
5) Payout Duration - What duration of time should the policy cover? Many policies will pay for certain lengths of time such as 1, 2 or 5 years of care, other policies are unlimited. The average stay in skilled nursing is 2.5 years and in assisted living, 22 months.
6) Daily Allowance vs. Expenses Incurred - Is an indemnity / daily care allowance better for the senior then a policy that covers only the expenses incurred?
7) Policy Cancellation Policy - Should the individual include a non-forfeiture clause that enables a senior to receive money back if they cancel the policy? At what cost?
8) Non-Care Expenses - Should the policy cover medications and/or home medical equipment? At what additional cost?
9) Tax Deduction of Premiums - Is a tax-qualified plan that allows the senior to deduct their premiums appropriate?
10) Partnership Plan - Is a “partnership plan” that allows the senior to protect their assets from Medicaid appropriate?
11) Definition of Care – How is “care” defined by the policy? Is non-medical care included? Companion care? Supervision for Alzheimer’s?
12) Cancellation by Insurance Company - Can the policy be cancelled by the insurance company? Or is renewal guaranteed?
It may be worthwhile to find a long term care advisor / broker that can help determine what one’s future care costs might be and choose a policy that will avoid unpleasant “gotchas” when it is actually needed.