Long term care insurance (LTCI) is one of the most misapprehended, miscalculated, and misjudged financial products available today. People are confronted with too many questions about this type of policy. Will I need long term care (LTC)? Should I buy a plan? What type of policy should I buy? What coverage does it provide? How much does it cost? These are just some of the questions interested buyers ask themselves. We will try to answer these in the discussion below with the focus on indemnity long term care insurance.
Question 1: Will I need LTC?
According to the American Association of Long Term Care Insurance (AALTCI), one of the biggest mistakes to avoid is thinking that it won’t happen to you. Nobody knows what may happen in the future. A person may encounter a chronic disease or a disabling condition that may require him specialized custodial care to assist him in his activities of daily living (ADLs). The possibility of getting disabled in at least 2 ADLs is quite high for those aged 65 and above. Planning for the future is a good strategy that can give you an advantage.
Question 2: Should I buy a plan?
LTCI is not for everyone. However, for baby boomers and seniors, it can be an important part of a sound and reliable retirement plan. Early planning including early purchase of an LTCI can help one avoid the devastating effects of staggering long term care costs. Additionally, one must also consider his capability of paying premiums before getting a policy.
Question 3: What type of policy should I buy?
Three of the most popular types of LTCI are reimbursement, partnership, and indemnity long term care insurance.
As for reimbursement LTCI, as the name suggest, the policy holder gets reimbursement for actual charges. As for partnership policies, it offers asset protection and qualification for Medicaid benefits. On the other hand, indemnity LTCI gives the insured what his policy covers for. For example, an individual purchased a $300 a day policy and his bill is $200 a day, he will still receive the $300. He can keep the $100 for himself and use it for his other expenses or save it up.
Policy buyers often prefer indemnity plans over the others because it provides them control over their care. The fact that it is cash-based also adds up. Claims are easier. No need to file claims or submit receipts. This type of plan suits patients receiving care at home for they will not have problems tracking medical bills.
Question 4: How much does it cost?
Long term care costs vary in each state. Interested buyers can check the costs in their area and if they find them quite expensive, they can check the costs in nearby states. Most LTCI companies have websites that offer free quotes. People can use this tool to have an initial idea on how much an indemnity long term care insurance may cost.
Keywords: what is long term care insurance, long term care planning
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