Insurance World

Don’t let your LTCi be a disappointment
“I have $100 a day for life,” Gloria, one of my clients, complained. “Why do they only give Carolyn $25.00 a day?”

Gloria owns several policies with my company. However, her LTCi, which she is currently using, is with a different company. Carolyn, her home health aid, receives limited pay because Gloria’s policy includes only 50% home care. While Gloria would receive $100 a day indefinitely in a nursing home, she can only get $50.00 a day for home-care. Furthermore, since Carolyn does not work through an agency, she is considered “non-professional” and will be paid no more than $5.00 an hour. To make matters worse, Gloria is still paying her full monthly premium because her policy does not include a waiver of premium unless she is in a nursing home! This situation could have been avoided.

Take action to protect your interests
Long Term Care insurance, a type of protection that pays the bills when a person needs extended care either at home or in a nursing home, should be part of senior planning for every adult who owns property, investments or savings–or who simply wants to protect freedom of choice, independence, and family harmony. Nevertheless, 65% of adults over 40 admit to having made no plans for long term care for either themselves or a spouse, according to Genworth Financial.

Put the excuses on the table
The first excuse for putting off the purchase of LTCi is money, but the real reasons are usually a matter of denial–you don’t really believe you will ever need it–and confusion over the mountain of information. Numerous companies offer LTCi insurance, and while the policies are similar, the language can vary significantly from one company to another. Make one inquiry, and multiple packets crammed with information will soon fill your mail box. You don’t know what to do, so you do nothing.

LTCi: Basic coverage and features
Fortunately, understanding LTCi is not as difficult as it seems. However, it is not a one-size-fits-all program, so doing it on your own or over the phone is not a good idea.

Basic coverage
All LTCi begins with the basic coverage–a maximum dollar amount per day multiplied by the number of days of coverage. The actual premium is then based on your age. For example, a three year, $100 per day benefit would give you 1095 days times $100, or a “pot of money” of $109,500 to spend. Even though most nursing homes charge more than $100 a day, your pot will last at least three years because you can’t spend more than $100 per day. Once the company has paid $109,500, your policy is exhausted, and you will have to pay for additional care yourself.

The other part of your basic coverage is the elimination period, a deductible consisting of a set number of days that you must pay for care before your policy will start paying. Some companies go strictly by the calendar, others go by the actual days you received care. A longer elimination period reduces your premium.

Feature 1: Home care
Features are benefits included with no extra cost. For example, most companies can offer a choice of whether you want to include care in your home. It may be included at a slightly higher premium, or it could be a rider, depending on the company. You can also choose 50% or 100% home care. If you choose 100%, you can spend your maximum of $100 per day for care in your home. Furthermore, while nursing home care has to be calculated on a daily basis, most companies calculate home care by the month. You could thus spend $50 one day and $200 another day, so long as you do not go over $3100 per month (in our $100 per day example).

Feature 2: Waiver of premium and discounts
Most companies will waive your premium when you have to start using your coverage. Some waive the premium from day one while others require you to be on claim for at least 90 days first. If you should get well and go off of claim, your premium would resume. Some companies waive the premium for both spouses if just one goes on claim. However, nearly all companies give a discount if husband and wife are on the same policy.

Feature 3: Restoration of Benefits
The best companies include a restoration of benefits feature, meaning that if you only need care for a few months and are able to go off of claim, your entire pot of money is “restored,” giving you the full policy to use again when you need it. However, the pot can only be refilled if it has something left in it–even as little as $50.00.

Feature 4: Home modification
Many companies will pay several times your monthly benefit to modify your home with things like wheel chair ramps, widening of bathroom doors, or rails in the bathtub or around the commode.

Feature 5: Caregiver training
Do you have a family member who is able and willing to participate in your care? Some companies will pay several times your daily benefit to train that person who will then take care of you at their own expense, making your policy benefit last much longer.

Feature 6: Respite care
Respite care is simply a vacation for a family member who has agreed to help take care of you. For a certain number of days each year, a company will put you in a nursing home or find someone else to take care of you, and the company will foot the bill up to your maximum daily benefit.

Feature 7: Equipment rental
Equipment rental is simply the rental of hospital equipment–such as a hospital bed–usually up to the purchase price of the equipment.

Feature 8: Adult day care
The better companies include adult day care where you can get therapy and interact with other seniors. Usually transportation, meals, therapy, and help with activities of daily living are included.

Feature 9: Prescription drugs
The inclusion of prescription drugs–of the type given in a nursing home or hospital–is a very important feature, but many companies only include drugs with a rider. Ask about it.

Feature 10: Room reservation
What if you get sick while you are in the nursing home and have to go to the hospital? The room reservation feature reserves your bed for a certain number of days each year.

Feature 11: Hospice and ambulance
Medicare pays for the nursing needed during hospice as well as for a certain number of ambulance trips per year. However, most LTCi policies offer some additional ambulance dollars as well as the home health aid and domestic services if you are on hospice.

Feature 12: Patient Care Coordinator
Companies have different names for this, and many don’t offer it at all. A patient care coordinator is a person who will work with you to find the agencies in your area. The person will find out what the agencies charge, and will help you choose the appropriate agencies to meet your need. The coordinator can also help you file claims by explaining how to correctly complete the paper work.

Remember, features of a policy are included without extra charge. It’s worth paying a bit more for a policy that includes a lot of features rather than buying something cheap only to find out that benefits you would have liked aren’t included.

Buying insurance has become a necessity in today’s world. But a good insurance policy doesn’t come cheap. The premiums you pay will increase as you extend the duration of the policy. Hence whole life policies are more expensive than term insurance. This is because a whole life policy covers you for the entire life while a term insurance policy will offer cover only for the term decided while signing up for the policy. A term insurance policy is a cheaper and simpler way to insure your partner’s and your family’s financial future if you die. Here are some useful tips on buying the cheapest term insurance policy.

Why should I buy life insurance?

You should buy term life insurance if you have a mortgage or dependants. In the unfortunate event of death, the insurance will pay off the mortgage, thus providing shelter to your family, who in other circumstances would have been left homeless.

What should the term of my term life insurance be?

The duration of your term insurance should equate the duration of the mortgage. This ensures that if you die, it will clear off your debts so that your family has a roof over its head.

Why should I buy term insurance?

With plenty of insurance policies flooding the market, it becomes confusing for a layman to find out the right policy meeting your needs. Besides, buying complex policies will force you to pay higher premium. Term insurance is a simple and cheap policy that pays a certain amount entirely on your death. As there is no investment factor included in the policy, you do not get anything if you are alive when the policy expires. This means the insurer cannot charge you heavily for this policy, making it the cheapest policy in the market.

How should I buy a term insurance?

Due to progress made in medical science, the quality of our life has increased. This has brought down the cost of insurance premium by 40%. If you are paying the premium at the old rate, negotiate with your insurer or look around for a new one. Get quotes from various insurers before committing yourself. This is because there is a vast amount of difference between various policies. Though you can buy a policy from a physical entity like bank or an insurance broker, internet offers the fastest and simplest way to get the insurance. You can get online quote instantly and understand the premium you will have to pay. Quotes are just an estimation of the premium you will pay. The actual premium will be decided once you have submitted the application form. Insurer will consider various factors like height, weight, age, sex, smoking, presence of diseases and other factors before deciding the premium. If you are unhappy with the premium, you can terminate the policy.