3 Key To Compare Long Term Care Policies
When a new financial or insurance product is introduced, it can be a few years before industry standards are set. Long term care insurance is one of those products. While it’s been available for several years now, insurance companies have frequently introduced new long term care policies with varying features, making it hard for the average person to compare one long term care policy against another. Here are some basic guidelines to make it easier for you to analyze your long term care policy options: Begin by Comparing Companies Before you even begin to compare long term care policies, you should compare insurance companies. There are so many who are established in long term care policy or entering the market, that it can be tough to know the good ones from those that are not as reputable. In addition to speaking to your insurance broker, talk to other people you know that have purchased long term care policy. Find out about their experiences, and then check consumer websites, newsletters and magazines to learn about the track records of the insurance companies that you’re considering. Your state’s insurance department is also a great source of information about companies, including the number of consumer complaints filed against them in recent years. You can also use the ratings provided by independent firms such as A.M. Best, Moody’s, TheStreet.com, Standard and Poor’s, and Fitch to get unbiased analysis and opinion on an insurance company’s ability to pay its claims. It’s obviously important to choose a firm that will be there are be able to help you when you need them the most. Next, Compare Long Term Care Policy Options Once you’ve narrowed your choices to a couple of sound insurance companies, you need to determine which long term care policies best meet your anticipated future needs. Since there’s no standard contract in the long term care industry these days, it’s important to know exactly what long term care policies cover – and what they leave out! Review the sample long term care policies the companies can provide to you, and make sure you understand all of the long term care policy provisions. Some of the most important include:
Waiting Period – This is the amount of time that has to go by before an insurance company starts to pay claims. These periods vary from as short as the effective date of the policy to as long as one year later. The shorter the waiting period, the higher the premiums will be. Benefit Period – One your claim for benefits begin, you’ll receive those benefits only as long as the benefit period lasts. Some last for one or two years, while others can last your entire life. Daily Benefit Amount – This is the dollar amount the policy will pay towards your nursing home and home health care. Cost of Living Adjustment – This optional feature protects you against inflation. It automatically increases your benefit amounts so that you don’t lose valuable coverage due to changes in the buying power of a dollar. Range of Care – A good policy should provide for all of the possible types of care you may need in the future. Those include skilled care, intermediate care, and custodial care. Pre-existing Conditions – Some policies impose a waiting period for claims that result of a medical condition you had at the time the policy was issued. After the waiting period has expired, benefits are paid as normal. Other Exclusions – Some long term care policies exclude certain medical conditions, such as Alzheimer’s or Parkinson’s disease. Others may require that, in order to receive benefits, you must be in a specific type of care facility. Be sure you understand the exclusions completely! Premium Increases – Some policies have the same premium for the duration of the policy, while others have premiums that could change during the policy period. Waiver of Premium – Most long term care policies allow you to stop paying premiums while you’re receiving benefits from the policy. It’s critical to understand when the waiver of premium period begins, and under what circumstances it can continue.
Guaranteed Renewability – As long as your health does not change, most policies allow you to renew your coverage once the initial coverage period expires. Grace Period – Like other insurance policies, most long term care policies also give you a grace period within which to make your premium payment if you miss a due date. Restoration of Benefits – If your long term care policy has limited lifetime benefits, each payment you receive reduces the amount your eligible to collect in the future. A restoration of benefits provision makes it possible for your benefits to be restored to their original levels if you go for a specified period of time without any claims. Return of Premium – Some long term care policies will return a portion of your premiums to you if you cancel your policy after having paid your premiums regularly and been claim-free for a specified number of years. Prior Hospitalization – Some long term care policies will not pay benefits unless your illness of injury requires hospitalization for a period of time. Not too many company sell policies with this provision, and it’s a good idea to avoid this type of policy if you are offered one.
Finally, Compare Premiums With as much variation as you mind find between two long term care policies, a simple comparison of premiums tells you almost nothing about which is the better coverage for you. Your goal is not to find the long term care insurance policy with the lowest premium, but to find the one that best meets your potential needs, now and in the future. The cost of the coverage is just one part of making that determination. In general, premiums are based on the coverage options you select, along with your age, your medical history, the cost of medical care where you live, and a small number of other factors. Want more information or a quote on long term care insurance? Please call (866) 972-3262 to speak with an experience long term care insurance specialist to learn more about long term care policy and best & most affordable quotes and rates or complete the Long Term Care Insurance Quote request now.