Long Term Care Insurance Policy Benefits
|To insure adequate long term care coverage, it’s a good idea
to understand the long term care insurance policy features and benefits.
Long Term Care Insurance policy benefits may include the following:
- Facilities Care Coverage
Daily nursing home benefits cover room and board and skilled or
custodial care in an institution. Assisted living facilities are
- Home and Community Care Coverage
Home health care covers services of licensed nurses, aides and
therapists. Coverage of non-licensed providers varies between
- Benefits Period
How long benefits should last depends on what you can afford to
pay in premiums over the years. Buy the longest benefit period
that you can reasonably afford, 5 years minimum.
- Inflation Protection
A benefit that keeps the policy’s buying power in pace with
future cost of health care. There are 3 types of inflation protection:
automatic 5% annual compounding; automatic 5% simple interest;
and option to buy more coverage at periodic intervals without
- Elimination Period
The elimination period is the time a person has to pay out-of-pocket
for services before the long term care insurance takes over. Most
will offer 90 day elimination or you could pay a higher premium
for a zero day elimination period. The definition of elimination
period varies with the long term care insurance companies. Some
policies can require elimination to be met in a certain calendar
period while others may require elimination to be consecutive
days of care. Read and understand the elimination period in the
- Stated Period Policy vs. Pool of Money
Your policy will list a total dollar amount of benefit for over
the stated term. In a stated period policy, your contract will
only pay up to the number of years you selected no matter that
you used less than the maximum benefits per day. A $100 per day
policy for 5 years would end at 5 years even if the policy only
paid $50 per day.
A pool of money policy is superior to the stated period policy.
A pool of money policy will let you stretch the benefits years
if you do not take out the maximum daily amount.
This option is usually referred to as the ‘maximum lifetime
Indemnity Claims Payment – Under this option, the long term
care insurance company will send you a check once a month for
the maximum allowable daily, once you qualify for benefits. You
don’t have to file claims for every expense.
- Shared Benefits
This option allows couples to transfer benefits to each other
from the same policy or between policies.
- Non-Forfeiture Benefits
Waiver of Premium
Your payment of premiums may be waived when the benefits under
the policy are being received. There may be restrictions and a
certain number of days care under the policy may have to pass
before it takes effect.