Retirement News : Seniors : Five questions to ask before choosing long-term care policy

Five questions to ask before choosing long-term care policy

Date Added: 15-06-2005

Purchasing a long-term care insurance policy is a major financial decision. The cost of the coverage and the impact it could have on your financial security make it imperative that you understand what you're buying before you sign your name on the dotted line.

The benefits offered by various long-term care policies can differ widely, as the companies providing the coverage seek to maintain both affordable premiums and profitability. As you compare policies, look for these five essential elements:

Does coverage include nursing-home care, assisted-living care and in-home health care?

Don't assume that all long-term care policies cover in-home and assisted-living care. Many do, but check the policy to make sure. Given the choice, many nursing-home residents would opt instead for in-home care. A long-term care policy that includes coverage for both in-home and assisted-living care can make the difference between receiving care in your own home or moving to a nursing-care facility.

Does the policy provide adequate coverage for the daily expenses?

Long-term health-care costs vary widely (daily rates vary from $100 to more than $300) nationwide. As you are evaluating different policies, you will want to ensure that the daily benefit provided by the policy will cover the typical costs for nursing-home and in-home care in your area. In this area, it can run more than $350 per day.

Is coverage provided for both skilled and nonskilled care?

Many long-term care policies cover skilled care, but nonskilled care may be a different story. Coverage for nonskilled care, which could include home health-care aides, visiting nurses and chore services, is important if you intend to remain in your home for any long-term medical treatment. Make sure that any nursing home or in-home care coverage provided by the policy is not limited to care administered by skilled practitioners only.

Is coverage provided for Alzheimer's disease and other cognitive illnesses, if it develops after the policy is in effect?

The number of nursing-home admissions that are a result of Alzheimer's disease and other impairments, such as senile dementia that afflict older Americans, is on the rise. Many long-term care policies provide coverage for Alzheimer's and similar disabilities that occur after the policy is in effect, but it's a good idea to make sure such coverage is spelled out in the policy.

Is inflation protection included?

Inflation protection is very important. If it is not included in the policy, ask for it. Without some form of inflation protection, the cash value of the benefits provided may not adequately cover the increased costs of health care in the future. Remember, when you are buying long-term care insurance, you don't expect to need it tomorrow. And hopefully, you won't need it until many years from now.

There may be other essential elements that you require in a long-term care insurance policy, depending on your individual financial situation and your medical history.

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