Long Term Care Coverage Choices and Options

When you are shopping for Long Term Care insurance, you will find that there are a lot of policies and features to choose from. Most policies include the same standard features.

Coverage for the following types of care is provided in most comprehensive Long Term Care insurance policies:

  • Nursing Home Facilities
  • Assisted Living Facilities
  • Home Health Care
  • Adult Day Care

Most Long Term Care insurance policies are reimbursement contracts where benefits are paid
only for expenses that are incurred, up to a predetermined benefit amount. Indemnity contracts pay the entire predetermined benefit on a daily or monthly basis.

Daily Benefit
The daily benefit you select is the maximum dollar amount that the insurance company must pay for your care on a given day. Some policies pay this benefit out as a weekly or monthly benefit, which allows you to receive benefits for expenses greater than your daily benefit. The daily benefit ranges from $50 to $500 per day depending on the insurance company.

Home Care and Adult Day Care Benefits
This benefit covers costs provided by skilled professionals like registered nurses and licensed therapists as well as homemaker services. Adult day care benefits are usually included also. chca
The home health care benefit the carrier will pay is usually based on a percentage of the daily benefit. For example, if you choose a 100% home health care benefit, you would receive 100% of the daily benefit you selected for services in your home. The choices vary by carrier, but some other examples are 75%, 50%, 100%, or 130%.

Benefit Period
The benefit period can range anywhere from one year to unlimited years (lifetime coverage). The benefit period is also stated as number of days of coverage multiplied by the daily benefit to equal a lifetime maximum amount of money to pay for your care. For example, if you purchased a four-year benefit period with a daily benefit of $200, this would give you a lifetime amount of 1,460 days X $200 = $292,000.

Waiting Period
The Waiting Period options are: 0, 20, 30, 60, 90, 100, 180, 365, or even 730 days. This is similar to the deductibles you are used to in other types of insurance. The longer the Waiting Period, the lower the premiums.

Inflation Protection
The two most common are 5% compound and 5% simple inflation protection. These options increase your benefits over time, but your premiums stay level for the life of your policy. For a $100 policy with 5% simple inflation, the benefit increases $5 every year, and is $150 after 10 years. For a $100 policy with 5% Compound Inflation, benefit increases 5% per year and is $162.89 after 10 years.

You may choose a Cap on Inflation Protection which lessens the cost of this option. The Cap limits the amount that the Daily Benefit can increase to 100%.

Discounts Available
If you are in excellent health, the discounts range from 10% to 25%. Insurance companies use applications, Attending Physician Statements and interviews to determine who qualifies for a preferred rate. Spousal discounts range from 10% to 60% and can apply even if the spouse is declined or does not purchase coverage.

The CHCA discount ranges from 5% to 10% depending on the insurance company.

Contact a Long Term Care Specialist