Understandably, the most common question regarding Long Term Care (LTC) insurance is “how much?” Other questions such as what is covered, how are benefits paid, and how does LTC work soon follow.
How much does LTC insurance cost?
Premium amounts depend on sex, age, and the health of the applicant. Also involved in the calculations are how much coverage is involved, whether pegged to inflation, and if the policy will be paired with another financial product such as a life insurance policy. Because there is such a wide variety of LTC policies, matching a policy to a certain budget and other financial planning needs is easily accomplished.
What does a Long Term Care policy cover?
Generally speaking, all LTC policies will cover the basics such as Assisted Living, Home Health Care, Nursing Home Care, and Adult Day Care.
Benefit Payment Models?
With plenty of variations, LTC benefits fall into two general categories… Reimbursement and Cash Indemnity.
Reimbursement policies require that bills and receipts be submitted each month to the insurer to determine the amount of reimbursement. Not all expenses that an individual may consider necessary for their care are covered. Services such as hair care, housekeeping, and massage therapy will likely be excluded.
Cash Indemnity policies are generally more flexible than reimbursement policies. There are no bills and receipts to submit, and the policy’s monthly benefit is paid out. The insurance company doesn’t restrict how benefits are used for care. If you want to use some of the funds each month to pay your nephew to clean your home, take you to the hair stylist and mow the lawn, this is allowed. You can even hire a family member as a private care-taker.
The next blog post will address the different types of Long Term Care policies.