Basic Parts of a Long-Term Care insurance Policy

You’ve done your research and have decided that Long Term Care Insurance (LTCI) is right for you and your family. The next step is to become familiar with the basic structural components of an LTCI policy.
When building an LTCI policy there are four primary variables that must be considered. They are:

• Daily benefit amount

This refers to the maximum amount an insurance company will pay per day when extended care is needed. To determine the proper daily benefit amount you must first determine the cost of care in your part of the country.

• Benefit period

This refers to the length of time an insurance company will pay benefits if the insured receives the full daily benefit amount. If the insured receives less than the daily benefit amount then the insured’s policy will last longer than the defined benefit period.

• Elimination period

The elimination period is similar to the deductible on your homeowners or auto insurance. It is the amount of money you, the insured, agree to pay before the insurance company begins paying.


• Inflation protection

Many insurance companies provide several options when it comes to inflation protection. The first and most costly option is 5% compound inflation option. This option, as the name suggests, automatically increases the daily benefit amount every year. Another option typically offered is a guaranteed purchase option which gives the policyholder the opportunity to purchase additional coverage. Under this option if you elect to increase your coverage your premium will increase, too.

These are the main parts of the LTCi policy. There are other riders and features that add to the flexibility of the LTCi policies. When it comes time to structure your LTCi policy, consulting with a LTCi specialist will save you considerable time and effort by using his experience and education to design a plan that is right for you.

Long-Term Care Insurance-What to Consider...

The news has been filled with lots of news regarding the long-term care insurance industry. Some carriers are announcing sizable premium hikes while other carriers are leaving the long-term care business entirely.
There are a couple of reasons that carriers find the need to raise premiums.

1. The carriers are seeing claims that are higher-than expected.
2. They have been hampered by low interest rates making it difficult to grow a cash cushion.

Does this mean that you should never consider this type of insurance? Absolutely not! It does mean that you should do your homework.

Policies offer dozens of permutations such as different daily benefit amounts, coverage lengths and ways to protect against inflation. Consult with an independent Long-Term Care Specialist who can help you design a plan that is specific to you and your situation.

Ask yourself if long-term care coverage is worth it?

You may be paying annual premiums for 20-30 years before making a claim or never using it. But skipping coverage can prove costly, too. The most expensive form of long-term care, a private nursing home can run more than $200 a day or more than $70,000 a year.

What will the cost be 30 years from now?