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Long Term Care Insurance
Many people become sick or infirm in their
later years. The high cost of nursing home
care can quickly deplete most or all of their
life savings since Medicare and most other
health insurance plans are designed to cover
only short term medical needs. Medicaid (federal
insurance for the poor) may help, but generally
only after you've reduced your life time
savings to near zero.
Long term care insurance is designed to provide
coverage for many long term care costs to
enable you to get the care you need without
endangering your savings. Here are some points
to consider when shopping for long term care
insurance:
- Consider what your income and assets will
be at the point you might need care. This
will help you purchase the right amount of
insurance without requiring you to drastically
change your lifestyle or financial picture
either now or then. For example, consider
what deductible you can afford (this is referred
to as the elimination period). The more days
you stay in a nursing home before benefits
start, the less expensive the policy will
be.
- Look for automatic compounded inflation protection.
A policy that pays out $200/day in 2005 dollars
will not be worth very much in another 25
years if the benefits are not also pegged
to inflation and costs continue to soar.
- Payment triggers (things that cause the insurance
to start paying out) and their associated
benefits should be easy to understand and
not overly restrictive.
- Home care is an important benefit that allows
you to recuperate at home while still receiving
benefits to cover in-home care.
Be sure to shop around. Compare
premiums,
benefits, deductibles, and co-payments.
In
spite of state regulations, each
company
sets its own rates based on competitive
forces.
And remember that the single
most important
factor affecting the cost of
long term care
insurance is age, not health
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