Long Term Care Insurance and Senior Citizens

The intent of long-term care insurance is to reduce the costs if someone needs long-term care from a paid provider. Long term care insurance can help with the costs of care facilities. This may include a nursing facility, home care, assisted living, but the insurance will not cover the full cost of the care. Many people invest and pay premiums for long-term care insurance for years before they need long- term care, and often times they may never need to use the insurance. Qualifying for long-term care insurance when you have health problems can become difficult in your later years. A policy with poor terms can turn out to be a wasted investment, but many people get it for peace-of-mind. People may buy long-term care insurance because of the rates of senior care that their loved ones may not be able to pay for when the times comes. Medicare rarely covers long-term care costs and expenses, so the insurance would be a beneficial investment in that instance.

Many types of insurance are available to seniors. You are required to pay an annual premium, they are tax deductible, and there is an option for state partnership which allows you to keep more assets and still qualify for Medicaid coverage. The cost of long-term care insurance depends on the age of the person covered, the amount of the benefit, how long the benefit is paid, the types of care covered, the health status of the individual when signing-up for the insurance, and the cost of long-term care in the state where the beneficiary lives. Premiums are lower for younger people, therefore it is better to get an insurance policy sooner than it is to get it later.

The coverage depends on the insurance plan that you choose. Anyone between the ages of 18 and 84 that are in good health can purchase long-term care insurance. Many policies will cover only nursing home care, homecare, nursing care, physical therapy, assisted living, or medical equipment. They may also include respite services or adult day care services to help a caregiver who may need a break from Caregiving. You may want to note that some policies may not cover Alzheimer’s disease services, so make sure that your policy does indeed cover this disease expense. The more your policy covers, though, the higher the premium. Some policies will include a deductible or a waiting period if the policy holder has a pre-existing condition. Also, most policies do not cover anything related to alcohol or drug abuse.

Whichever benefits you buy, make sure the policy has inflation protection. Every year the cost of living increases, and healthcare costs go up, therefore having inflation protection will be beneficial to have in your policy. Look for the longest period of inflation protection to benefit the most from the policy. Some inflation protection includes compounding automatic increase, which is the best inflation protection. Another form is simple automatic increase, which automatically increases the benefit amount each year by a set percentage, but uses the policy’s original benefit amount to calculate the increase. Added Coverage Purchase inflation protection increases benefits if your pay more, therefore this protection should be avoided if possible.

Policies that offer a good refund provision is considered a more attractive option. There are different types of refund provisions that policies may offer. Step-down provisions allow people to lower their premiums in exchange for a lower benefit amount or a shorter benefit period. A nonforfeiture provision provides a small refund if you drop coverage before collecting benefits. Reduced paid-up provision allows a person to drop the policy after a set amount of time, and still collect reduced benefit amounts. The death refund provides a small refund to an estate if the policy holder dies before a certain age. The survivorship provision is if two people buy into a single policy, which will then allow the surviving person to stop paying the premiums but allowing the policy to remain active.

Insurance policies are legal contracts, so before signing into a policy, compare the policies, have a geriatric care manager help you, and get an elder law attorney to compare the policies with you. The more advice you receive, the better policy you will get. The broker will try to sell you the policy without telling you the small print. This can become a costly investment if you are not completely sure of the policy. Fraud can often be an issue for senior citizens, therefore have a professional look over your policy before you sign the contract. If you bought an insurance policy you do not approve of, it is best to cancel within 30 days.

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