Everyday Law for Seniors by Lawrence A. Frolik & Linda S. Whitton

Author:Lawrence A. Frolik & Linda S. Whitton [Frolik, Lawrence A. & Whitton, Linda S.]
Language: eng
Format: epub
Tags: Elder Law, Political Science, Law, General
ISBN: 9781317260066
Google: 13t_DwAAQBAJ
Goodreads: 8300444
Publisher: Routledge
Published: 2010-08-01T00:00:00+00:00

Choosing a Long-Term Care Policy

More than one hundred companies offer long-term care insurance, though many that once sold such policies have retreated from the market because it is so difficult to estimate the cost of future benefit payouts. The most important aspect of choosing a policy is its coverage, including the scope—what it will pay and for what type of care (e.g., nursing home, assisted living facility, in your own home) and the terms under which coverage will begin, including the length of any elimination period before benefits are payable and the triggers for the onset of coverage. You will also want to consider whether the policy is “tax qualified” and whether the policy qualifies as a “partnership policy” under your state’s Medicaid law.

Coverage. Because there is no standard long-term care coverage, you should examine each policy carefully. Most policies provide coverage for care in nursing homes, but you should consider whether home care and coverage for an assisted living facility are also important to you. The scope of coverage will impact the cost of the premiums.

Most long-term care insurance policies are pure indemnity, that is, they pay a fixed dollar amount for each day that you are in a nursing home or assisted living facility or are receiving home care. Other policies pay only for the actual daily cost of care up to a fixed amount. Some policies also have an inflation-adjustment rider that will increase the daily benefit by a set percentage, typically 5 percent per year. Given the rising cost of long-term care, you should consider purchasing the inflation-adjustment rider to assure that the benefit amount will keep pace with the actual cost of care.

Long-term care insurance generally pays benefits if you are certified by a physician as having cognitive deficits, such as those caused by dementia, or are unable to do two of the five activities of daily living:

•

bathing

•

toileting

•

eating

•

dressing

•

transferring (getting out of a bed or chair without assistance)

Many policies pay benefits for home care as well as nursing home care. Often home care benefits are one-half as generous as benefits paid if you are in a nursing home or assisted living facility. For example, the policy might pay $150 per day for nursing home care or care in an assisted living facility, but only $75 a day for care received at home. Because nursing home care is usually more than $200 a day, long-term care insurance will generally not meet the entire cost. It may cover most of the cost of care in an assisted living facility.

A long-term care insurance policy may limit how long it will pay benefits. Though it is possible to buy a policy that will pay benefits for the life of the insured, many pay benefits for two, three, or five years. The longer the policy pays benefits, the higher the premiums are. Time limits on benefit payments apply without regard to whether you are at home or in an institution, although some policies have separate time limits for home and institutionalized benefits.

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