By Sean Denny, www.long-term-care-insurance-planners.com
If you need long term care in an assisted living facility or nursing
home, will your insurance cover it? Many people think they’re
covered for long term care insurance, but they are mistaken.
Below are five primary questions you should ask yourself and your
insurance agent to determine that you will get the best long term
care insurance, for coverage that ensures peace of mind.
To make sure you can get coverage for long term care insurance,
you need to understand the many services you might need, and the
difference between available long term care insurance policies.
The National Association of Insurance Commissioners provides a
list of industry standards that help people who are considering
long term care insurance.
1. Do I already have coverage?
According to a recent survey by
AARP, people wrongly believe their other insurance, such as health
care or disability policies, will cover their long term care needs.
Or they think Medicare will cover it, when in fact that program
is strictly for short term care needs. Although some employers
have begun to purchase group long term care insurance policies
for their employees, the vast majority of Americans are not insurance
for this vital elder need.
2. How do I evaluate the insurance companies offering long
term care insurance? According to the respected non-profit organization
Consumer Reports, people should check the ratings of potential
insurers before buying a policy. Free company ratings are available
at the web sites of A.M. Best, Moody’s and Standard & Poor’s,
or you can purchase rating information from Weiss Ratings. Be sure
of the company’s stability before you buy.
3. What are the basics of coverage that should be required?
According
to the NAIC, you should buy a policy with at least one year of
nursing home or home health care coverage. Additionally, long term
care insurance coverage should not be limited to skilled care,
but also should include intermediate and custodial care. Also,
the policy should include coverage for Alzheimer’s, and should
contain a guarantee that the policy cannot be cancelled or non-renewed
because of age or health status. It should have a “free look” period
(often 30 days) that allows you to return the policy for a refund
within that time.
4. How do I compare policies?
Each company should offer an “outline
of coverage,” says the NAIC, that defines the benefits, limitations
and exclusions. The agent or company should also provide a “shopper’s
guide” that will give you a basic understanding of this valuable
type of coverage. At www.long-term-care-insurance-planners.com,
for instance, when you order a free quote, you receive quotes from
three of the top insurers, making comparison easy. The site also
includes in-depth information on understanding long term care insurance.
5. Should the effect of inflation be considered?
Yes, say the insurance
commissioners, the policy should offer an option for inflation
coverage. People buy long term care insurance to cover care needs
at some point in the future, and the cost of services will continue
to rise. For instance, the federal Centers for Medicare and Medicaid
Services estimate that nursing home costs will rise by 5 to 6 percent
a year over the next decade. For those who can afford higher premiums,
an inflation clause helps the policy keep pace with expenses.
A person who is age 65 today has a 40 percent chance of entering
a nursing home, according to a study by the U.S. Department of
Health and Human Services.
As our population ages, the demand for long term care will continue
to grow, making it even more important for people entering their
retirement years to take a serious look at the coverage options
available through long term care insurance.
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