Choosing Your Long Term Care Insurance Policy Accurately
Long term care insurance (LTCI) is beneficial only if you choose the right policy. Decades ago, LTCI was only intended for nursing home care, but these days you can choose from a list of long term care insurance policy options the type of coverage which will match your preferred long term care (LTC) setting.
Every LTCI policy bears a provision which conforms to a specific individual’s health care requirements so suffice to say that no two LTCI policies offer identical coverage. There’s a policy designed for individuals who want to receive care at home and there’s also another for those who see themselves entering an LTC facility right away at the onset of care. Despite these choices, experts advise buyers to consider a comprehensive LTCI policy as this provides coverage in different types of LTC settings.
With a comprehensive policy you can receive care at home especially if you don’t have a chronic illness and only require custodial care, or assistance with your basic activities of daily living (ADL), which old age has hindered you from performing such as bathing, eating, dressing, toilet use, continence management, and transferring from the bed to a chair or vice versa.
In case your health worsens and you would eventually require skilled nursing care, your comprehensive policy will provide you coverage in the best nursing home. It also covers assisted living facilities, adult day care health centers, hospice care, and the list goes on.
Should you request a facility-only LTCI policy, the insurance company from which you plan to purchase LTCI coverage can provide you this. You have to note, however, that if ever you do not develop a serious health disorder which will require nursing home care and you decide to receive in-home care, your policy won’t shoulder the expenses that you would incur from the latter.
Long Term Care Insurance Policy Options
LTCI policies do not only differ in terms of coverage but in their mode of payout, too.
Reimbursement LTCI policies are very common as these are cheaper than indemnity policies. Individuals who own a reimbursement policy will be paid the total amount of their expenses on care up to their maximum daily benefit amount. If the total amount of their LTC expenses is less than the amount of their benefits, the remainder shall be returned to their pool of benefits. On the other hand, if their expenses exceed their maximum daily benefit amount they have to pay the excess amount using their personal resources or nest egg.
Now going to indemnity policies, policyholders with this type of LTCI will receive the exact amount of their maximum daily benefit regardless of their actual cost on care. As a matter of fact, this type of policy does not require the insured to receive care from a licensed nurse or caregiver. He can receive care from a family member and still receive his benefits in full.
To simply the differentiation between reimbursement and indemnity policies, the former will manage your benefits while the latter will give you full responsibility.
Study your long term care insurance policy options carefully because the decision you make will affect not only the quality of care that you will receive in the future, but your finances and your family’s future.
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