Buying Long Term Care Insurance – Is It An Option for You?

There are several factors to consider if you are thinking about buying long term care insurance. Premium prices vary according to your age and health condition at the time you secure the coverage.  Premiums can be costly and, like most forms of insurance, you pay even though you may never need or use the coverage.

There are two basic types of long term care policies available to individuals and sometimes through groups.  The most common – the “Expense Incurred” policy -  allows you to choose a benefit that pays a set amount per day you spend in a facility.  You will be covered for a set number of days at a certain cost.  Most people buy coverage knowing they can supplement some of the expense by using their social security or pension benefits.  “Integrated policies” provide a fixed amount of total coverage that can be used for a variety of services.  Under an integrated policy, less expensive care would allow for additional days of coverage.

A third and completely different option is a Long Term Care Annuity. You purchase a set amount of total coverage for care.  If the benefit is never used, or only partially used, the balance of the investment you made is distributed to your heirs upon your death.  Talk to a financial planner who specializes in retirement planning to learn more about these policies.

One would begin receiving benefits from long-term care policies when one or more doctors declare that you are eligible.  You may need help with the Activities of Daily Living or you may have a cognitive impairment such as Alzheimer’s disease. The policy may have a waiting period in which case you or possibly Medicare, depending on the circumstances, will be paying for the initial days of care.

Shopping for & Comparing Long Term Care Insurance Policies

The sale of long term care insurance is governed by state insurance laws.  Just because someone is licensed to sell these products, however, does not mean they have experience finding the best policy for you.  Try and work with a financial planner or insurance agent who specializes in retirement planning or elder issues.

Finally, ask these questions to help navigate the choices available to you:

  • How long is the benefits waiting period and will it change if I have more than one stay in a nursing facility?
  • Does the policy have a nonforfeiture benefit? This option might allow some limited benefits or refund if you stop paying your premiums.
  • Is there any inflation protection?  This is particularly helpful if you're buying long term care insurance at a younger age.
  • Is the policy transferable to your spouse should you die first?
  • Are there any tax ramifications with the purchase of the policy?

If you live in Michigan and need experienced estate planning help, contact Michael Einheuser for a free consultation. Michael helps families in Bingham FarmsTroyFarmington HillsRochester HillsSouthfieldWest Bloomfield TownshipBloomfield Township, and the surrounding Michigan areas.

Schedule your Free Consultation today: (248) 398-4665.

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