Long Term Care insurance is a specialized form of insurance that pays for the ongoing health care received in an assisted living facility, nursing home, or in the home by a qualified provider. It is designed to provide coverage for health care areas not covered under a traditional health care plan, by Medicare or by Medicaid.
There are two main types of Long Term Care insurance policies available. These types are Tax Qualified and Non-Tax Qualified. The main difference lies in the taxability of the benefits and the requirements to activate the policy. Non-Tax Qualified plans requires only one activity of daily life to be impaired, but benefits received are taxed. Tax Qualified plans requires two activities of impairment, but benefits received are not taxable.
Long Term Care insurance plans are available in both forms from a variety of mainline and specialized provided, although Tax Qualified plans are more popular in the marketplace at present. When you seek out Long Term Care plans, keep your own personal needs and financial situation at the forefront as you choose which plan is right for you.
The younger you are when you purchase Long Term Care insurance, the lower your premium will be in general. Health and planned health is another aspect to take into consideration as you weigh out the different costs. Don’t be afraid to get multiple quotes to be sure that you are getting the coverage that you need at the facilities you want to be in for your area and physical condition.
Information Needed For A Long Term Care Insurance Quote
To get a quote for Long Term Care insurance, you will need to have your personal health information at hand. You should expect to answer basic demographic information questions as well as in depth questions about your medical history. If you have any pre-existing health conditions, they will need to be evaluated as a part of the pricing of your coverage.
Common Long Term Care Insurance Policy Features
Long Term Care policies have several common features. One big regulatory feature to keep in mind is that in the US, the language of your plan can not be changed after it has been put in force, making your coverage features binding for the life of the plan. Other common features of Long Term Care insurance policies are:
– Reimbursement payments. Payment for your Long Term Care is done on a reimbursement basis.
– Elimination Period. Before Long Term Care insurance coverage kicks in, you will have to wait out the elimination period. This is a period defined in your policy and usually equals somewhere between 20 – 120 days before coverage begins.
– Per Diem Limits. Coverage under your Long Term Care insurance plan will have daily limits on costs of care. You will be responsible for any costs that are above the daily limit.
– Health Cancellation Protection. Your Long Term Care insurance policy can not be cancelled due to a health issue that occurs after your policy has been put in force, and policies are designed to be life time renewable. Basically, you can only earn a cancellation for non-payment or if you move to have the policy cancelled.
Long Term Care Insurance Discounts Available
Bundling your Long Term Care insurance plan with other health and wellness plans from the same carrier is the best way to earn discounts. This kind of discount applies regardless of age.
Another common path to Long Term Care insurance discounts is membership in certain groups and professional associations. These discounts may not be available in all regions or from all carriers, but it never hurts to ask.
Long Term Care Insurance Exclusions To Note
If you plan to retire abroad, you will want to check the fine print in your Long Term Care insurance plan. Most policies only apply to care facilities in the continental United States. There are a few select plans that offer out of country coverage, but this is generally limited to a few designated care locations.
Some policies also require that Long Term Care insurance be in force for at least one year before any benefits can be paid. For this reason, it pays to buy Long Term Care insurance well before you think it will be needed.