The struggle of balancing monetary limitations versus what benefits they need can be a balancing act for most individuals. In a utopian society, all individuals would have exactly the coverage they need at exactly the right price, but in reality this can be a challenging task.
The best way to navigate the paths of long term care insurance is to work with a professional who can guide you through the process. One of the key elements when determining long term care insurance planning is to decide where you intend to receive care.
Do you prefer to stay where you live now or will you prefer to move to another state to be closer to family? The cost of long term care can vary quite dramatically depending on what state you are in. Today, the most expensive state for long term care is Alaska at more than $220,000 per year for the average nursing home care. The least expensive state is Texas at just over $46,000 per year.
How Much Coverage Do I Need?
- When you are trying to determine what maximum benefit is sufficient for your situation, you should begin by finding what the average long term care costs are in your state.
- You want to try and estimate how long you will need care; this is best done by considering your medical history and family history.
- Consider your elimination period. This is the period of time you must wait to receive benefits; the shorter the elimination period, the more expensive the policy.
- Consider the inflation options. It is important to keep in mind that you will most likely not be using this policy for a number of years, so it is important that your policy will keep up with the rising cost of healthcare.
When designing a long term care insurance policy, keep in mind that long term care insurance is like most other insurance plans, the higher benefit you choose, the greater the cost. Like most things, the more you buy, the more you pay. You want to find the balance between over-insuring and wasting money and the cost of underinsuring.
Understanding the fact patterns, equations and scenarios surrounding long term care insurance premiums will require the help of a professional. But keep in mind that, in most cases, it is more important to have some level of coverage as opposed to none at all.
Types of Long Term Care Insurance Policies
There are three major types of long term care insurance policies to consider once you determine your long term care needs:
- Reimbursement. This policy is the most common policy. It is designed to repay the insured for long term care expenses incurred up to the maximum benefits in the policy. Under this plan, you receive reimbursement only after expenses are incurred.
- Indemnity. This policy provides the maximum benefits specified in the policy every day care is received, regardless of what long term care costs are incurred.
- Cash Benefit. A cash benefit long term care insurance policy will provide you with maximum benefits specified in the policy regardless of whether care was received.
In addition to the major policies, there are additional benefits, restrictions and guidelines associated with each plan. It is best to consult a professional when designing a long term care insurance plan that is suitable for you and your family.