Study Your Policy Options Piece by Piece
Even if you have a substantial amount of money to get long term care coverage you should take your time in studying your long term care insurance policy options to avoid running short of benefits or overspending on your premium.
Anyone who earns close to $100,000 a year will naturally feel confident in spending and this is all right except in the area of long term care (LTC) where the figures are unpredictable. LTC costs are never fixed and what currently charges $77,745 annually could charge double the following year. Familiarize yourself with the present cost of care in your area and find out how much it will be when it’s your turn to require care.
Knowing the cost of care in your area is as important as identifying your future health care needs because it shall be the basis of your long term care insurance (LTCI) coverage. You cannot simply go to an LTCI carrier and order one policy with a five-year coverage period. It does not work that way as your policy’s maximum daily benefit amount should conform to the daily cost of care where you live.
For example, you want to receive care in your own home someday so you decide to buy an LTCI policy. But, instead of focusing on the cost of care in your area specifically that of in-home care services you put your concentration on the national median cost so your policy’s maximum benefit amount conforms to the national average cost of in-home care. Many years later you claim your benefits and much to your surprise, the amount of your policy’s maximum daily benefit is much lower than the actual daily cost of care in your area. So this results not only in bigger but unplanned out-of-pocket expenses.
Long Term Care Insurance Policy Options
Studying the cost of care in your area will not only help you figure out the amount of benefits that you will need from your LTCI policy, but also lead you to the appropriate inflation protection rider.
If you buy a policy without an inflation protection, you’re better off paying for care using your own personal resources. Don’t think inflation protection is optional because it is the only thing that will keep the amount of benefits in your policy at pace with inflation. Prices of goods and services including LTC rise approximately 5% every year owing to inflation.
Can you imagine how a policy with a maximum benefit amount of $250,000 can be of help to you 30 years from now if the annual cost of care would be $500,000 by then? Obviously, you will still end up with Medicaid and all the money that you’ve paid into your coverage will be nothing but waste.
Aside from keeping abreast of LTC costs in your area it is also necessary to identify the level of care that you will likely need someday as this will also have an impact on your benefits and coverage period. If your family has a history in Alzheimer’s you will no doubt need years of nursing home care someday.
Discuss your long term care insurance policy options with a licensed insurance agent before requesting quotes from the top LTCI carriers.
Processing your request, Please wait....
