Long Term Care Insurance is what I work with everyday (more specifically, providing LTC quotes for
insurance agents over the
internet). Basically it's insurance you can recieve benefit for when you are no longer able to perform a set amount of
Activities of Daily Life:
-
eating (or feeding)
- getting in and out of
bed
-
toileting
-
continence
-
dressing
-
bathing
The amount of activities that you are unable to perform before will recieve your daily benefit can vary, but most insurance carriers set the amount at 2 of the 6. You buy Long Term Care Insurance based on the amount you believe you will need to be taken care of on a daily basis. Nursing Home costs can range from $50-$200 day, or if you're not interested in Nursing Home Care, you can get a Home Health Care plan, or sometimes an integrated care plan that provides for both.
When selecting
Long Term Care Insurance, you make 3 main decisions:
- Daily Benefit Amount (usually beterrn $50 and $250)
- Benefit Period (the length of time you will recieve payment)
- Elimination Period (the amount of
time you will be responsible for paying for your own care before the
insurance begins to
pay)
The longer the Benefit Period, and the shorter the Elimination Period, the more expensive your
premium becomes. It's also recommended you get an
inflation rider, that will protect you from inflation either in the form of
simple (cheaper) or
compound (more expensive) interest. There is also a Nonforfeiture option that still allows for benefits even if you allow your policy to
lapse.
Most people recommend that
LTC Insurance be purchased in your late 50's or early 60's, but usually you can buy it from 40 onward (buying it earlier than 40 will result in the same premium as a 40 year old would pay). In this
range the cost is quite affordable and your
health is probably still decent. The premiums are based on your
age,
health, and the type of
plan that you
purchase.