How Much Can You Spare for the Elimination Period?
There are many factors to consider before buying a long term care insurance policy and one of them is your annual income. It has to be way above the poverty level and secondly you should have a substantial amount of assets to be able to satisfy your long term care insurance elimination period.
Although designed to pay people’s long term care (LTC) expenses, a long term care insurance (LTCI) policy will only step in and start paying out benefits once the insured individual has satisfied his elimination or waiting period already.
The elimination period is defined as the specific or predetermined length of time that an insured person has to pay for the LTC services that he acquires using his personal money. This immediately takes effect once the insured has met a benefit trigger such as cognitive impairment or inability to perform two or more of the six activities of daily living (ADL) which are bathing, eating, dressing, continence, toileting, and transferring.
Each LTCI company follows a set of rules with regards to the elimination period so it is necessary to ask your insurer to explain extensively its provision on the waiting period. Some firms require their LTCI policyholders to receive care for a consecutive number of days and the moment that they miss one day or two they may not qualify for their benefits. Meanwhile, other LTCI companies do not strictly require this and just leave the insured folks to complete their waiting period before they issue benefits.
When buying an LTCI policy you will be given choices for your elimination period. Most LTCI carriers offer 30 days as the shortest waiting period and 365 days or one year as the longest. You can also opt for an elimination period of 60 days, 90 days, or 180 days.
Choosing Your Long Term Care Insurance Elimination Period
Remember that the type of waiting period you choose will affect the premium of your coverage. The rule of thumb in choosing a waiting period is that a shorter benefit period equates to a higher premium while the longer it is the lower is one’s premium.
Before deciding to go for a longer waiting period, check your assets first. Are these enough to cover a year of in-home care in case you wind up needing this kind of LTC setting? What if you unexpectedly enter a nursing home, won’t you run short of money?
It is very important to take into account your daily living expenses when you plan your LTC because you will definitely continue to pay for the food you eat, new clothes, and gas you fill your car with. LTC will definitely not exempt anyone from his daily financial responsibilities.
If you are nowhere near 50 years old, use your time to study the features of a potential LTCI policy and consult a licensed insurance agent if you have any questions. Whatever your choice of long term care insurance elimination period would be later on, just see to it that it won’t run your coffer dry.
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