A 60-second read by Nicholas Scheibner: As people are living longer, paying for health care costs is becoming a top concern. Many people are beginning to consider if a Long-Term Care Insurance policy is best for them.
Before you look at purchasing a policy, here are ten terms that you should know:
- Elimination Period: Most Long-Term Care policies require you to “pay your own way” for a specified number of days (generally ranging between zero and 120 days) before an insurance company will begin to pay benefits.
- Waiver of Premium – When you begin receiving coverage, the premium will be waived. For a shared policy, if one person goes on claim (begins receiving coverage), the premium would be waived only for that person.
- Joint Waiver of Premium – If one person goes on claim, all premiums stop.
- Survivor Waiver of Premium – If one passes away, the survivor’s premium would be waived.
- Flex Credit – If the company does well on their investments, they may pay down your premium or you can save the extra for waiver of premium.
- Activities of Daily Living – Assistance with 2 of the 6 activities of Daily Living is required for most Long-Term Care policies to become active: Dressing, Eating, Transferring, Toileting, Bathing, Continence.
- Inflation Protection: Since costs inevitably increase each year due to inflation, most policies will offer a provision that will allow your daily benefits to increase annually by a certain percentage.
- Portability: The policies should be portable between states. Some will cover worldwide.
- Home Care: Does the policy offer home-care coverage? Some companies offer it as a rider to the policy for an additional premium.
- Pooled/Shared Policy: This is a policy that can be used between couples. The benefit can apply to either one or both spouses.
Please lean on us when considering a long-term care policy. We can help you go through the pros and cons of the decision. We can also help you determine how much you can afford in yearly premiums.