How to Buy Long-Term Care Insurance

Transferring the risk of nursing home or residential care costs to an insurance company may be one of the most important financial decisions you make.

Difficulty: Easy

Instructions

Things You'll Need:

• Calculators
• Life Insurance

1. Calculate the ability to self-insure: If net worth (assets minus liabilities) is greater than $1 million, it may be more cost-effective to set aside funds in a safe investment against the possibility of needing long-term care.

2. Calculate the ability to spend down assets: If the estate is small or can be gifted to heirs, it is possible that a future long-term care need can be funded through Medicare or state-assisted programs.

3. Contact several quality nursing home facilities in your area and ask for the person or department that handles long-term care insurance relations.

4. Ask which insurance companies have the best track records for paying claims and for customer satisfaction, and note their names.

5. Find out about the typical per-day, per-person care costs for those facilities, and write them down.

6. Call several high-quality home care or visiting nurse agencies and ask the same questions.

7. Average your per-day costs for nursing home care and for in-home care.

8. Contact an insurance agent specializing in long-term care insurance, and have your research results with you as you determine the amount of insurance that will meet your needs.

9. Apply to more than one insurance company, making sure that the features you apply for are as consistent as possible for an accurate cost comparison.

Tips & Warnings

• There are limited tax breaks for long-term care insurance premiums.
• The younger the insured, the lower the premium, but that can be offset by a longer premium-paying period. Generally speaking, don't consider long-term care insurance before age 55.
• Contact the Health Insurance Counseling & Advocacy Program in your area and ask them to send you information on long-term care insurance, or make an appointment to speak with a counselor.
• Medicare provides some long-term care benefits to those who qualify.
• Some states extend limited benefits for long-term care to those with low net worth.
• A variety of inflation riders are available and should be carefully considered.
• Adult children should consider sharing the cost of long-term care premium payments for their elderly parents.
• You don't need to include a check with your application to get an offer from an insurance company.
• Agents who don't specialize in long-term care probably won't be much help in getting you the best coverage.
• You will pay 100 percent of the cost of care during the waiting period of your insurance.
• Some companies will call you at home as part of the application process. This is routine, and doesn't imply a problem with your application.
• Be wary of single-premium life insurance policies that provide long-term care benefits but tie up capital.
• A few insurance experts believe that long-term care insurance is a bad deal. Investigate thoroughly and fully consider your individual and family situation before purchasing long-term care insurance.

[lavasgirl]

on 8/19/2007 I am a Certified Long Term Care Insurance Agent, and I have to report to you that there is a lot of untrue information and bad advice in this "how-to". You'd be better off checking out
http://www.weissratings.com/HL_LTC.asp
and choose to have a meeting with an agent from one of the top companies and go from there. There is so much misinformation here I wouldn't know where to start.
Danielle Villegas CLTC, Seattle Wa.