What to Look for When Shopping for Long-Term Care Insurance
The cost of skilled long-term care continues to explode. In Florida, many nursing homes are charging up to $100,000 a year for a private room, and semi-private rooms are not much cheaper. If you are looking for ways to defray the cost of getting older, then buying long-term care insurance could be an option. Below, our elder law attorney in The Villages highlights what you need to know so you are not taken to the cleaners or end up buying insurance that is useless.
Choose a Reputable Insurer
An insurance policy is only as good as its insurer’s financial position. If the insurer goes belly up, your policy probably will be worthless. For this reason, it is a good idea to only shop from reputable insurers. CBS News recommends that you buy from an insurer that has sold this type of product for at least 20 years.
To get a sense of reputation, you can check the insurer’s rating at www.moodys.com. You can also check with the Better Business Bureau.
Understand the Benefits Covered
You want a product that actually pays for care that you need and want when you get older. For example, do you only want coverage for nursing home? What about home health care or residential care facilities? Adult day care? You might find that you actually want these other services when you get older and require assistance, so make sure your policy meets your needs.
Identify the Daily Benefit
This is the monetary amount that the policy will cover each day. There are several things to look for here:
- The dollar amount
- Whether the daily benefit is tied to inflation or is fixed
- The amount of time you must wait after becoming eligible before you can start receiving your benefit
- The amount of time you can receive benefits (1 year? Rest of your life?)
As Kiplinger noted a few years ago, insurers are becoming stingier with their policies, and you might have to pay substantially more to get something like inflation protection. However, they also recommend that you be realistic about the amount of care that you need. Men who go into nursing homes, for example, stay on average for only a year. Women stay a little longer, 17 months. So getting a policy that pays benefits for longer might not be worth it.
It is cheaper to purchase long-term care insurance the younger you are. If you are 50 or older, then make sure you understand the math behind whether buying long-term care insurance is a good deal. Premiums could be substantial as you get older. You should also get quotes from many different insurers.
Choose Wisely whether to Buy
Unless you can comfortably afford the monthly premiums, there is little reason to buy. Paying insurance premiums for 2 years only to drop the coverage because you can’t afford it doesn’t benefit anyone. You need to make regular payments for years, and make sure your budget can handle it.
At Millhorn Elder Law Planning Group, we work closely with residents of The Villages to handle their legal needs. Our estate planning attorneys have helped people with many different types of issues, including qualifying for Medicaid. To speak with an attorney, give us a call at 800-743-9732.