Tips to Help You Choose Long Term Care Insurance

Long term care insurance pays for care a person receives at home or in a nursing home to help them with the activities of daily living, such as bathing, dressing, eating and using the bathroom, when they can no longer do these alone.  The need for this case is not limited to senior citizens and can be required by anyone who has an accident or an unexpected illness. 

The average cost for a nursing home stay is approximately $80,000 per year.  The statistics are alarming regarding people’s ability to pay for this care.  Approximately 50% of couples and 75% of single individuals will spend their life savings within one year of entering a nursing home.  Because long term care insurance can be invaluable in a crisis, it is important to do some research before buying a policy.  Here are some tips to make the process easier:

• If you see advertising that tells you Medicaid is associated with a long term care policy, be skeptical.  Medicare is a federal insurance program that does not sell, endorse or recommend Medicare policies.
   
• Find out if you qualify for a long term care insurance policy.  Once you have a pre-existing condition, you may be excluded from purchasing this coverage or may be limited in what types of policies you can purchase.  This is the best reason to buy a policy if you are younger and healthy.  If you wait too long, it might be too late.
   
• Read a long term care policy and make sure you understand what it covers and what services it does not cover.   Many times, long term care coverage can be the difference between being able to stay at home safely or entering a nursing home.  If your policy does not cover at-home care, you may end up with a nursing home being your only option.  Ask a lot of questions and make sure you understand all that is covered.
   
• Pick a good company.  Check with your state’s department of insurance and make sure the company you are researching is licensed in your state.  Check websites such as moodys.com or fitch.com to make sure the company is financially sound.
   
• Research insurance companies and ask whether they have a history of cancelling long term insurance coverage or raising rates on this coverage.  Also, when you contact the state department of insurance, ask how they regulate rate increases for this coverage.