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How To Select a Policy?2. How can I protect myself against the rising cost of care? 3. How much coverage is right for me? 1. What decisions do I need to make? If you decide to purchase a policy, it’s important to ask the following questions to help decide which options will be the most appropriate choice for your situation. a. Should I choose a Comprehensive or Facilities-Only plan? b. What Daily Benefit Amount should I select? c. What Benefit Period should I choose? d. How long should the Elimination Period be? a. Comprehensive Plan Comprehensive plans help pay for care received in the home as well as care received in facilities. A comprehensive plan covers long-term care services in a nursing home, assisted living or residential care facility, hospice care in a facility, and respite services in a facility. It also covers home care, adult day care, hospice care and respite care services at home. The ability to receive benefits for home care may allow the care recipient to live independently in their home instead of living in a long-term care facility. Facilities-Only Plan This plan covers long-term care services provided in a nursing home, assisted living facility or a hospice facility.k Facilities-only plans do not cover home care but are typically less expensive than comprehensive plans. Return to Top b. Daily Benefit Amount (DBA) Policies offer a benefit in the form of a “Daily Benefit Amount.” The DBA may be either the maximum or the actual amount the insurance policy will pay per day for covered services. Some policies offer benefits that are paid on a weekly or monthly basis. It’s important to know what the rules are for any policy that you might consider purchasing. Return to Top c. Benefit Period This is defined as the amount of time you wish to receive a DBA. This period can range from two to 10 years or an unlimited amount of time.
d. Elimination Period To keep the cost of your premiums lower, most policies become payable only after a period of time called an “elimination period” or a “waiting period,” which is similar to a deductible. These terms generally mean the same thing. This is the period of time during which you must be eligible for benefits (and in certain types of polices you must also be receiving covered services) before your insurance benefits become payable. During this time you will generally continue to pay premiums. Policies with a short or no elimination period are usually more expensive than policies with an extended elimination period. Some companies require that you meet the prescribed elimination period only once in your lifetime. Others require you to meet the prescribed elimination period each time you need long-term care services. Policies may provide different methods for calculating elimination period requirements when you receive home health care. Return to Top 2. How Can I Protect Myself Against the Rising Cost of care? There are four options, at an additional cost, that may help you protect yourself against the increased costs of care in the future. * Automatic Compound Inflation Option Automatic inflation protection helps keep pace with the future cost of care. This annual increase is based on your compounded DBA. Policies offer the option of automatic inflation increases. Choosing an Automatic Compound Inflation Option will result in a higher DBA than the Automatic Simple Inflation option. * Automatic Simple Inflation Option The annual increase, for the life of the coverage, is based on the DBA originally purchased. "Selecting either of these options at the time of purchase will result in initially higher premiums, but they will also provide an “automatic” yearly increase in benefits without an increase in premium — typically five percent each year." * Periodic Inflation Protection The premium that you pay when the insurance is purchased pays for the daily benefit amount you initially choose. Opportunities are offered periodically to increase coverage usually without having to provide evidence of good health. In some policies, these offers are only given to people who have not declined a certain number of increase offers. Your premium will increase based on your age at the time each inflation offer is accepted, but it will only increase for the current additional benefit you purchase. * Future Purchase Option (FPO) This option also offers protection against increases in long-term care costs. It increases your DBA and the remaining amount of your Maximum Lifetime Benefit every few years at an extra cost, as long as you are not eligible for benefits and you don’t decline the increase. In some policies, once you have declined a certain number of increases that have been offered to you, you will not receive other increase offers unless you specifically request an increase in your DBA and pass the insurance company’s underwriting requirements. Return to Top 3. How much coverage is right for me? The cost of care varies throughout the country so when selecting a Daily Benefit Amount it’s important for you to buy sufficient coverage that will pay for care where you expect to receive it. Costs for home care, nursing homes and assisted living facilities vary widely, depending on the region. The Area Agency on Aging may be able to provide current cost figures for you. See page 3 for national average costs. Return to Top For additional information see the links below: Long-Term Care Insurance-Home Page General Information 1. What is long-term care? 2. Where can I receive long-term care services? 3. What are Activities of Daily Living (ADLs)? What is the Cost of Long-Term Care Services? Paying for Long-Term Care Services 1. How are long-term care services paid? a. Self-Insure b. Medicaid c. Medicare d. Long-Term Care Insurance Is Long-Term Care Insurance Appropriate for You or a Family Member? 1. Who could benefit from purchasing long-term care insurance? 2. What is the right age to purchase long-term care insurance? 3. Is there anyone who should not purchase long-term care insurance? What Are the Costs of Long-Term Care Policies Based On? What About Different types of Policies and Coverage? 1. What is the difference between “reimbursement,” “indemnity,” and “disability” type policies? 2. What is a "Tax Qualified" policy? 3. What are "Partnership Programs"? How Long Can I Expect to Need Coverage? What About Benefits? 1. How do I become eligible to receive benefits? 2. Who determines when I am eligible for benefits? 3. What happens to my benefits if I stop paying my premium? 4. What is a “return of premium on death” benefit? What Else Should I Know? 1. Can I change my mind if I buy a policy? 2. Can my premiums be raised? 3. How can I evaluate a long-term care insurance company? 4. How can I obtain detailed information on long-term care insurance? Return to Top |
Austin Insurance Group
Austin - Cedar Park (and surrounding Counties) (512) 339-2901 Nationwide 1-800-929-3166 email: aig@texas.net Click for Insurance Quotes:
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