What questions should I ask when purchasing long term care insurance?


When you are in the market for long term care insurance, you should be sure that you buy one that will suit your specific needs and situation. You should go through the following checklist to help you choose from among the policies available in the market.

  • What illnesses are covered? You should look into whether the policy covers illnesses you are particularly susceptible to. What illnesses are prevalent in your family? Do your parents/grandparents have heart disease or cancer? These should then be on top of the list of illnesses you should check that the policy will cover. What mental and nervous disorders are covered? Is Alzheimer's disease included?
  • What services are payable under the policy? Does it cover nursing home or assisted living facility only, or will you have other options, such as home health care, payments for home health aides or caregivers or regular nurse visits? What kind of service or facility do you prefer, based on your situation?
  • How much will the premiums be?
  • How much is the benefit amount paid monthly or daily? Be careful when choosing your benefit amounts, since what may sound reasonable (or even high) at this time may actually be very small 20 or 30 years from now. Take inflation into account when choosing the benefit amounts.
  • How long is the payment period? How many days or months will the checks come?
  • How about lifetime limits? Is there a maximum lifetime limit? The maximum lifetime limit means that the policy will pay up to a specific amount for the entire life of the policy.
  • How long is the waiting period? After the date the policy is issued, there is a waiting period where claims will not be payable. The waiting period may also be designed for a specific list of illnesses. During the waiting period, you will be the one to cover any expenses.
  • How long is the elimination period? This is the first few days where you will be the one paying for the nursing home care or any care facility you sign in.  Ask about the number of days you need to wait before the insurance will start paying. The elimination period is similar to co-insurance or deductibles used in health insurance.
  • What guarantees does the policy have? Is it guaranteed renewable and/or non-cancellable? Does the policy also have non-forfeiture options? These are facilities which enable you to get back at least a portion of your paid premiums when you decide to cancel your policy or if you are unable to pay the premiums anymore.
  • When claiming, how does the insurance company determine whether eligibility? Will they make an assessment as to cognitive impairment or how you are unable to do day-to-day activities? Will a certificate from your doctor be needed? Will the payments only start when there is a prior hospital care?
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