What Is Long Term Care Insurance and how does it work?

Long Term Care Insurance Features

Before you buy a long term care insurance policy, it would be best if you knew what you were buying, right?  Not only are there many different long term care insurance companies out there but there are also many different features that distinguish one company's long term care product from a competitor's product.
 

Cost Per Day or Daily Benefit - The daily benefit that a long term care insurance policy pays out should be considered before buying a policy.  How much money per day would it cost to take care of someone who needs CUSTODIAL care?  By custodial, I mean bathing, feeding, moving from bed to toilet, dressing, and the like.  Statistically speaking, the average cost per month is around $3500.  Multiply that times 12 and you're looking at depleting the best of nest eggs in very short order!  Unless you want a simple "band-aid" plan whereby you will be paying out of pocket in addition to the payout of the policy, I would advise that you get at least the average cost per day as the daily benefit on your long term care insurance plan.  At my home base in South Carolina, the average cost per day is around $135.  Each State has a different average, though, so make sure you ask lots of questions of your local facilities and custodial care providers.  The higher the daily benefit (of the policy), the higher the price of the insurance.

 

Length of Benefit - How long do you want the policy to pay?  If money was no object, you would probably buy the policy that paid for an unlimited number of years.  Since this is often not the case, most people have to take into consideration the facts that are out there and couple those facts with their own experiences and the advice that they receive from others.  Statistically speaking, the length of time that one is in need of custodial care is 2.5 years.  That means that if you rely upon statistics, a long term care insurance plan with a payout duration of 2.5 years would be the way to go.  Consider, though, that once you get up in age and perhaps get to where you are in need of custodial care, there is a chance that you will live for many years past that statistical 2.5 years.  In the case of people with Alzheimer's, one may be looking at a long period of time in which there is a need for custodial care - in this case, you would want to have bought a policy with an unlimited length of benefit (benefit period).  My opinion is - if you have a family history of living for a long time with the need for custodial care, go for the unlimited coverage period.  On the other hand, if you do not have such a family history, you would probably be alright with a 2-3 year coverage period.  The longer the coverage period, the more expensive the long term care insurance policy.

 

Inflation protection - What was a dollar worth and what would a dollar buy 30 years ago?  What will one of today's dollars be worth in 30 years?  This is what you need to consider when you choose an inflation protection rider for your long term care insurance policy.  A good question to ask yourself is - how long might it be until the insured goes on claim and needs custodial care?  If you are 50 years of age, statistically speaking, you would probably go on claim in 25-30 years.  In this case, you would do best to get the "compound" inflation protection rider whereby every dollar you put into the policy grows with compound interest; each year that you have the policy, the benefit amount (~$135/day in S.C.) increases by ~5% of the previous year's amount.   If you are in your 70's, you may want to look at getting "simple" inflation protection...if you are past age 70, you may want to do "no inflation protection".  It all depends upon when you think you might go on claim...in the relatively near future or in the distant future.  No inflation protection is the cheapest, simple inflation protection costs a bit more, and compound inflation protection is the most costly in terms of the long term care insurance policy premium.
 

Elimination period - Once you trigger the benefits of the policy, how long do you want to have to wait until the policy starts paying the bills?  By choosing a shorter elimination period (say, 30 days), you will have less time to wait.  By choosing a longer elimination period, you will save some money but you will have to wait a longer period of time before the policy starts paying out.  My advice is to choose your elimination period based upon your circumstances with co-pay, what you can bear to pay out of pocket, and Medicare (see my next section on Medicare and Medicaid).

I want to invite you to read more about long term care insurance and the benefits of getting a long term care insurance policy.  I appreciate your comments and emails and I look forward to working with you to achieve the financial security and comfort that you have worked so hard for.  Please read on:

GE Long Term Care Insurance
Long Term Care Insurance Features
What do Medicare and Medicaid cover (and not cover!)

What about Medicare and Medicaid?
 

Medicare and Medicaid will only last so long and will only cover you under certain circumstances.  Trust me, you do not want to leave this uncovered risk up to the government!  If you rely upon Medicare and Medicaid, you will end up at the mercy of "the system".  Further, Long Term Care costs are very high - in some States the cost of care is around $300 per day!  Don't let this deplete your family's resources - get a long term care insurance policy as soon as possible while you still qualify medically and while you are in your money making years.

Call Agent L. Ashley Brooks, CLTC Toll Free at 1.800.223.2762 for all of your family's insurance needs including long term care insurance, universal life insurance, term life insurance, and whole life insurance.

GE Long Term Care Insurance is the only Long Term Care Insurance Product you need!

GE Long Term Care Insurance covers the insured whether they want facility care, at-home care; skilled nursing facility care, or nursing home care.

Request your quote for long term care insurance coverage today by clicking here - Your quote will be emailed to you right away.