NBGS ONLINE
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online 2010

Long Term Care Insurance

In order to establish the best way you should structure your long-term care insurance policy you will need to know some of its basics. Until you have met all the established health guidelines of long-term insurance companies you will not be sold any policies, so the best time to apply for any coverage is when you are in your youth and healthy. It is important you answer every health question with honesty as these insurance companies may cancel your policy or may not pay your claims if it is discovered you did not answer thoroughly. There are certain conditions “benefit triggers” that must be met for benefits to be paid by insurance companies and they may differ from policy to policy. For a tax-qualified policy, for example, to pay benefits, one must have a cognitive impairment such (this could be any of it including Alzheimer’s) or be incapable of carrying out a minimum of two daily activities of the six activities of daily living without considerable support for about 90 days. A licensed health-care practitioner also has to give you a plan of care. There may be less restricting benefit triggers for non-tax-qualified policies. Generally, before a long-term care policy starts making payments for your care, a waiting period called the “elimination period” exists. The most common options are for benefits to start in 20, 30, 60, 90, or 100 days and starts the moment your benefits are triggered and you are receiving covered services. Whatever long-term care services you get at this time may have to be paid by you. You have the opportunity to pick a daily benefit amount, most likely between $50 and $350 daily, for care in a nursing home when you buy a long-term care policy. In cases where home care is covered by the policy, the benefit could be 50% or 70% or a part of the nursing home benefit. Be sure you are informed on the cost of long-term benefits in your area before picking your policy’s benefit amount. Typically, a longer benefit period attracts higher premiums and these benefits could be paid for your lifetime, or for 1, 2, 3, 4 or even 5 years. The number of years you select as your benefit period and the daily benefit amount both determine the lifetime maximum amount for your policy. It is mandatory for insurance companies to yearly renew your policy as long-term care policies are “guaranteed renewable” except in cases where you exhaust your benefit, fail to pay your premiums, or misrepresented your health status in your application. At any time of your choosing, provided you notify the insurance company, you can cancel your policy. Be sure you know how your policy treats unearned premiums. These are any premiums paid in advance for coverage yet to be provided. Overtime, long-term care policy premiums may increase. The premiums on these policies without fixed rates can be increased by the companies but they can only do this if everyone in your “rate class” is affected by the increase. There are no conditions under which a company may single you out for a rate increase, irrespective of the number of claims made by you or any changes in your health.
Older couple
NBGS ONLINE
Everything you wanted to know about insurance products … but were afraid to ask.
© NBGS Online

Long Term Care

Insurance

In order to establish the best way you should structure your long- term care insurance policy you will need to know some of its basics. Until you have met all the established health guidelines of long- term insurance companies you will not be sold any policies, so the best time to apply for any coverage is when you are in your youth and healthy. It is important you answer every health question with honesty as these insurance companies may cancel your policy or may not pay your claims if it is discovered you did not answer thoroughly. There are certain conditions “benefit triggers” that must be met for benefits to be paid by insurance companies and they may differ from policy to policy. For a tax-qualified policy, for example, to pay benefits, one must have a cognitive impairment such (this could be any of it including Alzheimer’s) or be incapable of carrying out a minimum of two daily activities of the six activities of daily living without considerable support for about 90 days. A licensed health-care practitioner also has to give you a plan of care. There may be less restricting benefit triggers for non-tax- qualified policies. Generally, before a long-term care policy starts making payments for your care, a waiting period called the “elimination period” exists. The most common options are for benefits to start in 20, 30, 60, 90, or 100 days and starts the moment your benefits are triggered and you are receiving covered services. Whatever long-term care services you get at this time may have to be paid by you. You have the opportunity to pick a daily benefit amount, most likely between $50 and $350 daily, for care in a nursing home when you buy a long-term care policy. In cases where home care is covered by the policy, the benefit could be 50% or 70% or a part of the nursing home benefit. Be sure you are informed on the cost of long-term benefits in your area before picking your policy’s benefit amount. Typically, a longer benefit period attracts higher premiums and these benefits could be paid for your lifetime, or for 1, 2, 3, 4 or even 5 years. The number of years you select as your benefit period and the daily benefit amount both determine the lifetime maximum amount for your policy. It is mandatory for insurance companies to yearly renew your policy as long-term care policies are “guaranteed renewable” except in cases where you exhaust your benefit, fail to pay your premiums, or misrepresented your health status in your application. At any time of your choosing, provided you notify the insurance company, you can cancel your policy. Be sure you know how your policy treats unearned premiums. These are any premiums paid in advance for coverage yet to be provided. Overtime, long-term care policy premiums may increase. The premiums on these policies without fixed rates can be increased by the companies but they can only do this if everyone in your “rate class” is affected by the increase. There are no conditions under which a company may single you out for a rate increase, irrespective of the number of claims made by you or any changes in your health.
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