Long Term Care Insurance

Long-term care insurance is a type of insurance developed specifically to cover the costs of long-term care services, most of which are not covered by traditional health insurance or provincial health care systems. These include services in your home such as assistance with Activities of Daily Living as well as care in a variety of facility and community settings.

There is a great deal of choice and flexibility in long-term care insurance policies. You can select a range of care options and benefits that allow you to get the services you need in the settings that suit you best. The cost of your long-term care insurance policy is based on the type and amount of services you choose to have covered, how old you are when you buy the policy, and any optional benefits you choose, such as Cost of Living Protection. If you are in poor health or already receiving long-term care services, you may not qualify for long-term care insurance, or you may only be able to buy a more limited amount of coverage, or buy coverage at a higher rated rate.

Long-term care insurance policies have a benefit period or lifetime benefit maximum, which is the total amount of time or total amount of dollars up to which benefits will be paid. Common benefit periods for long-term care policies are two, three, four, and five years, and lifetime or unlimited coverage. Other options between five years and lifetime/unlimited coverage are also available from many companies. Most policies translate these time periods into dollar amounts and do not actually limit the number of days for which they will pay for care – just the overall dollar amount that the policy will pay. There are fewer companies today willing to offer an unlimited/lifetime policy, although some have a “high coverage option” like a $1 million lifetime limit.

With long-term care insurance, you pay premiums in amounts you know in advance and can budget for, and the policy pays – up to its coverage limits – for the long-term care you need when you need it. Typically, premiums are waived during the time you are receiving benefits.

You select a daily benefit amount (for example, $100/day), which is the maximum daily amount of expenses for care the policy will pay. Most policies let you choose from $50/day to as much as $500/day.  A growing number of policies specify benefits in terms of a monthly amount so that you have the flexibility to receive more care on some days (for example, when family care is not available) and less care on other days.

 

Often you can choose whether you want the policy to pay the same daily benefit amount for care in all settings, or whether you want the policy to pay less for care in less costly settings, such as home care. Common choices include a home care benefit of 50 percent or 75 percent of the daily nursing home benefit amount.

 

You choose a Maximum Lifetime Benefit or total lifetime amount you want the policy to provide. Policies typically offer a choice of lifetime dollar amounts – for example $100,000 or $300,000. The dollar amounts may correspond to a period of time. For example, a three-year policy at $100/day of benefits would provide you with a total of $109,500 for care. Some insurers also sell “Lifetime” or “Unlimited” coverage that has no dollar limit; you receive benefits as long as you continue to need long-term care and receive covered services.

 

You choose the type of coverage you prefer – “comprehensive” or “facility care only.”   Comprehensive policies cover a wider range of care settings and services including both care at home and in various types of facilities.

 

Most policies today are comprehensive, but some people prefer to buy facility care only policies. These pay for care in a nursing home or assisted living facility, but not for care at home or in the community. These policies may still include hospice or respite care but only when those services are provided in a facility. Facility-care-only policies cost less than comprehensive policies, and if people prefer and have family or friends to provide care at home, they may only have the policy to reimburse them for paid care in a facility if and when they need it.

 

Many policies offer additional optional benefits or “riders” allowing you to customize your coverage. One important option is Inflation Protection, which helps protect you from the rising cost of care over time. It works the same way that an inflation clause on your homeowners’ insurance works: As the cost of replacing your home increases, so does the amount of insurance coverage that you maintain on the home. Most people who buy long-term care insurance opt for an inflation protection rider which builds the cost in to the starting premium, so the cost of the policy doesn’t increase simply because the value of the coverage increases with inflation.  But there are many different types of Inflation Protection in long-term care insurance. Be sure to find out more about Inflation Protection options in any policy you are considering.

 

Most policies offer benefits in a variety of settings, such as your home, an adult day care center, an assisted living community, or a nursing home.

If you are looking to get covered for any eventualities’ in life than you are at the right place. Get a Free No obligation quote from us and see how we can design the insurance for you, which can cover you in a better way and costing you least every month.

Barrie@jantzifinancial.com

or 519-591-1584

or 1-800-878-1952

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