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The 3 basic features of a Long Term Care Plan:
Benefit Amount:This is the daily amount of money that the company will pay during your Benefit Period. Elimination Period:(also called 'Waiting Period') How long an insured has to be disabled before benefits begin. Typical elimination periods are 0,30,90 days. Therefore, if you have a 30 day Elimination Period, your policy starts paying for your care on the 31st day. Benefit Period: Once benefits have begun, this is the maximum amount of time in which benefits will be paid(expressed either in days, years, or maximum dollar amount). Inflation Protection: This option will increase your daily benefit either on a "simple" (i.e. 5% of the base daily benefit amount) or "compound" (i.e. 5% of the total accumulated daily benefit amount) basis. Caution:If you choose a plan that will pay up to a limited dollar amount, the inflation protection will actually cause your benefits to run out quicker!!! This makes a strong case to obtain the longest benefit period possible. Next, there are two types of benefits available..... "Indemnity" and "Reimbursement" "Reimbursement Plan"will pay your selected benefit up to the actual fee of the service. This type of plan will stretch your benefits over a longer period. "Indemnity Plan" would pay the actual benefit amount that you have selected- even if it exceeds the actual cost. While the additional amount may help pay any extra costs, you will exhaust your maximum benefit quicker- unless a 'lifetime benefit' is chosen. Other important features: Restoration of Benefits:Your policy benefits can be restored if you stop receiving benefits for 180 days. For example, let's say you have a 3 year benefit period and you receive 2 years of Nursing Home Benefits. If you come out of the Nursing Home and do not receive any benefits for 180 days, your full benefit period will be restored. In the same example, if your policy does not have the Restoration of Benefits feature and you come out of a nursing facility after 2 years... you'll still be paying full premium for what has now been reduced to a 1 year benefit. Vanishing Elimination Period:The better plans will have justOne Elimination Period per your lifetime. Example: You have a 90 day waiting period and are disabled for 60 days before recovering. The next time you're disabled you just need to satisfy the remaining 30 days... NOT a new 90 day period. Joint Waiver of Premium: If one of the two people covered under the same policy enters a Nursing Home and stays longer than stated in the policy (usually 90 days), premium payments for BOTH people are waived. This means that NEITHER person will have to pay premiums until the period of confinement ends. Alternate Plan of Care:To allow you to stay at home for as long as possible, many plans will pay for modifications to your home. These may include installing a wheelchair ramp and redesigning your shower/bath. The cost is usually subtracted from your total benefit. Limited Pay Period:A few companies have an option that will allow your policy to be totally paid up after a certain period of time (i.e. 10 years). This could be a very beneficial feature if rates were to increase in the future- once you've paid your premiums, you will lock out any future rate increases! Also, you may find plans that offer a "Single Premium" option where you make just one lump sum premium... and the policy is totally paid up forever! |
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Long Term Care issues continued... Medicare will NOT help much with LTC costs DRG's cause patients to be released ASAP ABC's of a Long Term Care insurance plan Recommended
benefits and features 10 Reasons to consider a LTC plan now!
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