Which Long Term Care Insurance Policy to Buy
One has to take a good look at all long term care insurance policy options before he can identify which one will be most suitable for his future health care needs.
Each type of long term care insurance (LTCI) policy has features which others do not have. Each addresses a specific set of long term care (LTC) requirements and so it is very important to study the offerings of every LTCI policy before deciding which one to buy. Picking the wrong policy usually results in serious problems later on especially in making claims.
One type of LTCI policy and the most common is the Reimbursement LTCI Policy. This is designed to reimburse the insured individual for his actual expenses on care up to his maximum daily benefit. In case the insured individual’s incurred expenses on care would exceed his maximum daily benefit he has to pay for the excess from out-of-pocket using his personal resources.
For example, the total accrued expenses of a 75-year-old widow in a nursing home totaled to $209 therefore this is the amount that her insurer will reimburse to her even if her policy stipulates that her maximum daily benefit is $250 for a period of three years.
Meanwhile, the remaining $41 shall be retained in the widow’s pool of benefits. Once she has reached the end of her benefit period, she can still continue to receive LTC coverage until she has used up her accrued benefits down to the last penny.
Another kind of LTCI policy which is more expensive but at the same time considered advantageous by majority of LTCI buyers is the Indemnity LTCI Policy. With this type of policy the insured individual will receive a fixed amount of daily benefit regardless of his actual expenses on care.
Let’s say your indemnity policy specifies that you have a maximum daily benefit of $300. Once a benefit trigger occurs you will receive $300 in benefits regardless of your incurred LTC expenses. In case the total amount of your daily LTC expenses exceeds the maximum daily benefit that is stipulated in your policy, you will have to pay the excess amount with your personal resources.
Analyzing Long Term Care Insurance Policy Options
According to LTC specialists, 89% of Americans over the age of 50 would rather stay home and receive care from family members rather than be placed in a nursing home. If this is your preference, too, you can start looking at an indemnity policy as this allows a policyholder absolute freedom to choose where and how to spend his insurance benefits.
Reimbursement policies require policyholders to acquire care from a qualifying health care provider before they can reimburse their expenses. Insured individuals with reimbursement policies have to submit to their insurers an official receipt which was issued to them by a nursing home or assisted living facility to serve as proof that they indeed acquired care.
To get a better understanding of your long term care insurance policy options, contact a licensed LTCI representative in your area with whom you can discuss your LTC requirements.
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