Choosing a long term care insurance plan

A good long term care insurance (LTCI) policy includes coverage for:

• home health care
• assisted-living facilities
• nursing homes
• adult day care
• hospice services
• respite care

Also ask these important questions before choosing a plan:

• Will the policy be automatically renewed as long as the purchaser keeps paying the premiums?
• Will the insured be required to spend time in a hospital before receiving benefits?
• Will the policy pay the spouse or friend of the insured to be a caregiver?
• Will the purchaser stop paying premiums, once he or she begins receiving benefits?
• Is there one deductible for the life of the policy?
• Is there coverage for pre-existing conditions?
• Can the plan be downgraded if the premiums become to expensive?
• Does the plan provide coverage for Alzheimer’s and Dementia?
  

Does the plan include inflation coverage? 

It is important to find out whether a plan includes inflation coverage.

In Long Term Care Insurance, “inflation coverage” refers to protection against future increases in the cost of LTC services.

As medical costs continue to rise with inflation, it is important to know whether a given plan includes inflation coverage. Most plans allow you to add inflation coverage to the policy. Adding this coverage will likely increase your monthly payments.

Compounded Protection is the term used to describe inflation coverage. The best policies pay 5% a year compounded.

For New York State residents: a Partnership Policy 

If you are a New York State resident, a Partnership Policy may make sense.

New York State Partnership for Long Term Care is a partnership between many New York State insurance companies and the State of New York. These policies combine private long term care insurance and Extended Medicaid coverage.

This program protects some financial assets, if the purchaser’s long term care needs extend beyond the private policy coverage. The purchaser can avoid spending down assets in order to receive Medicaid coverage. 

For example, after paying for three years of skilled nursing care and five years of homes care, the insured could be eligible for Medicaid, without becoming impoverished. 

For more information on this program go to www.nyspltc.org.