Long Term Care (LTC) Insurance, Simplified

In spite of the government push toward Long-term Care Insurance and the growing awareness that seniors will have to depend on their own resources for care in their last years, LTCi remains the most difficult products for an agent to sell and is certainly the one insurance that—in spite of the enormous pot of money that could be paid out—consumers are hesitant in buying.

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Why? Most people say that they don't know for sure that they will ever need it. Maybe, after all, you or I will be one of the four in every ten people who will NOT need nursing home or some other form of LTC in our senior years. Of course, most of us will never need our fire insurance either, but that sure doesn't stop us from wanting it.

LTCi should be part of your senior planning. You will feel more confident in your search if you simply know what LTCi will do, what it won't do, and how to determine whether a "cheap" sounding policy is what you think it is.

First, LTCi is NOT hospital care. It is also NOT just someone to sit and keep you company when your family is gone. It is NOT homemaking service, unless a doctor has said that you are unable to perform certain daily activities on your own—such as eating, dressing, bathing, toileting, continence, or getting in and out of your chair or bed (called activities of daily living or ADLs)

Long Term Care Insurance IS extended care when you need the help of either a skilled nurse, therapist, or home health aid to perform the ADLs, or when you need to have someone with you because of a cognitive impairment such as Alzheimer's Disease or dementia. If either of those conditions apply, then a host of other services becomes included in your LTC and is provided for you by the better companies.

The Basics
First, it is highly advisable to work with an agent. There is very little difference—often no more than $20.00 per month—in terms of premium from one company to another for similar policies, but you will need someone who understands the company language to make sure you get what you want. All start with a daily benefit—the amount per day the insurance will pay, a "multiplier"—which is the number of days or months for which your policy will pay for care, and an elimination period—which is a time deductible for which you must pay for your care before the policy kicks in. You should always compare prices based on the basics first, then find out what features are included without the expense of additional riders.

The Features
Features are things included in your policy that do not require an extra premium. These should include a range of health care services, including home health care, and assisted living care as well as nursing home care, rental of hospital equipment, transportation services, meal delivery, various types of services from home health aids and therapists. You should also look for restoration of benefits, waiver of premium, respite care, bed reservation, and prescription drugs, just to name a few. If you understand the basic calculation, you can then look at the list of included features and determine what makes one company better than another. You can be sure that if a company's price is radically lower than two or three others, there is a reason. Either the rates will go up about every five years, or many features that you would expect to have included must be purchased as riders. It's better to get a more complete policy from a company that specializes in senior health insurance products than to face disappointment when you need to start using it.

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