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Long Term Care
"Long-term care" (LTC) is a phrase which is used to describe a variety of
services in the area of health, personal care and social needs of persons who are
chronically ill or infirm.
Recent studies based on nursing home admissions indicate that 40% of all persons age 65
and over will enter a nursing home in the future. Because of our aging population, a lot
of interest has grown for LTC policies. When considering such a policy, keep the following
provisions in mind:
- Amount of the Benefit: Most policies pay a fixed dollar amount for each
day your are eligible for the benefit; e.g., $100 per day. Do a survey of nursing home
costs in your area to help determine the desired amount.
- Inflation Protection: Since costs inevitably increase, a policy without a
provision for inflation may be outdated in a few years. Of course, an additional charge is
incurred for this protection.
- Guaranteed Renewability: This important provision will prevent the
insurance company from canceling your policy for as long as you continue to pay the
premium when it is due.
- Prior Hospitalization: This provision requires one to be hospitalized
prior to entering the nursing home or no benefits will be paid under the policy. This is
an undesirable provision.
- Pre-existing Conditions: Most policies limit coverage of pre-existing
conditions to discourage persons who are already ill from purchasing the policy.
- Period of Confinement: This important provision indicates how long a
person can stay out of the nursing home before being readmitted for the same condition,
without being required to go through a new waiting period. The period should typically not
be less than 90 days.
- Home Care: Does the policy offer home care coverage? Some companies offer
it as a rider to the policy for an additional premium.
- Waiting Period: Most LTC policies require you to "pay your own
way" for a specified number of days (generally ranging between zero and 180 days)
before the benefits begin. Of course, the shorter the waiting period, the higher the cost.
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