Which Long Term Care Insurance Policy is Right for You?
Insurance companies that sell long term care insurance policies offer consumers an array of options. Each comes with unique features patterned to specific set of health care needs.
Most people who are headed towards retirement prefer to age in place, meaning to say in the comfort of their own homes. Whether they would develop a serious health disorder that will eventually entail 24-hour nursing care or just require assistance with their activities of daily living (ADL) like eating, bathing, dressing, use of the toilet, continence, and transferring they want it done in their homes.
Meanwhile, about 2% of today’s population over 55 years old acknowledges the possibility of them entering a nursing home. These individuals are either with pre-existing conditions or they suspect that there is something in their systems which represent a precursor to a serious illness.
Each set of LTC requirements has a corresponding long term care insurance (LTCI) policy so it is wrong to think that you could spend $3,000 yearly for the premium of your coverage if you choose to receive care at home, as this is the amount that your neighbor is currently forking out for his policy.
Long Term Care Insurance Policies for a Whole Gamut of Services
There are three major types of LTCI policies and these are the indemnity, reimbursement, and those that fall under the Partnership Program.
Among these, indemnity plans are touted as the best but very few people can afford this type of policy as it is expensive. What makes indemnity plans expensive is the fact that it pays the total benefit amount of the insured regardless of his actual expenses on care.
For example, a 78-year-old woman receiving home-based care has an indemnity policy with a maximum daily benefit amount of $200. Even if the woman pays her home health aide only $57 for three hours of care, she still receives $200 in full from her LTCI policy.
Meanwhile, a reimbursement policy, as the name would suggest, only pays the actual expenses which the insured incurs in a nursing home or another LTC facility which issues official receipts.
To illustrate that further here is an example. Eighty-year-old Lance has a reimbursement policy which stipulates a maximum benefit amount of $225. In a nursing home his total daily expenses totaled $190 so his insurer will only reimburse him $190 while the remainder which is $35 shall be returned to his pool of benefits.
It was also stated earlier that reimbursement policies pays for care received in a nursing home or other LTC facilities that issue receipts. Simply put, if you are planning to receive care at home a reimbursement policy is not going to work for you because home health aides and personal care assistants do not issue official receipts.
Now the third and last of long term care insurance policies but definitely not least, Partnership plans. Anyone who buys this type of policy will have the privilege to apply for Medicaid assistance in the future without spending down his assets, as this plan has a special feature known as the Medicaid Asset Protection.
To learn more about your LTCI options, get in touch with a licensed LTCI representative in your state of residence.
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