Long Term Care Insurance: Coverage and Choices

Long term care insurance is used to offset the costs associated with long term care services, such as in-home assistance and nursing home care. Many people believe that these expenses are covered by their health insurance, but find out the hard way that they are wrong.

When buying long term care insurance there are many choices to be made. Most of them are based around the coverage that you want, as well as how much you are willing to spend.

Here are several details that you will need to consider when buying a long term care insurance policy:

  1. Daily benefit amount. In most cases, your options range from $50/day to $500/day. As you can imagine, the lower your daily benefit amount the less you will pay. Over the past few years more and more providers have begun to offer a monthly benefit amount as opposed to daily.

  2. Maximum lifetime benefit. How much money do you want your long term care insurance to payout over the life of the policy? For instance, you could choose a lifetime maximum of $300k. With this, you have $300k worth of care available to you.

  3. Comprehensive or facility care only? Most long term care insurance policies offer comprehensive coverage. This means that your policy will offer benefits both in home and at nursing homes or other facilities. Of course, a facility care only policy usually costs less. Some people opt for this because they have family that will be able to care for them if they stay in their home.

  4. Policy riders. Some companies offer optional benefits that many consumers take advantage of. For example, inflation protection is very common. This helps to keep you protected against the rising cost of health care.

How much are you willing to pay?

Now that you know more about your coverage choices, you probably want to dig deeper to find out how much you will have to spend. The cost of long term care insurance differs based on your age and policy.

The average annual premium of long term care insurance is approximately $2,300. This takes into accounts buyers of all ages and types of policies. A buyer over the age of 70 will pay roughly four times as much as one under the age of 40. Fortunately, you have the right to design your own coverage based on the selections detailed above. This can go a long way in helping you find an affordable policy – regardless of age and budget.

When shopping for long term care insurance it is important to compare all your options, including the companies selling the policies as well as the different levels of coverage.

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