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The major attributes of long term care policies on which one should need to concentrate

The major attributes of long term care policies on which one should need to concentrate

Every long term care insurance policy consists of a number of features and attributes that must be known and kept in mind. However, it is also important to concentrate deeply on some of these attributes. All these characteristics of long term care policies have been discussed in this article. This includes the time and conditions for receiving benefits, occurrences that must occur before these policies starts paying benefits, time span and continuity of benefit period, payout procedures of policies, and their other essential stipulations and features etc.

Formulating a decision to purchase a long term care insurance policy must be made much carefully by bearing in mind different particulars and queries. A long term care insurance policy consists of different features and attributes that you need to know in details, segregate out certain characteristics and attributes on which you will need to concentrate on, and then set out to purchase such a policy.

Where can you expect to receive care services and coverage from a long term care insurance policy?

Some of the most preeminent long term care insurance policies offer coverage for meeting the expenses incurred for getting care services in a nursing home facility, residential care facility and also in assisted living provisions. The benefits and coverage are usually stated in daily quantities, with a life span limit. There is some long term care policies that compensate more or less half of the expenses incurred daily for home care and nursing home care services. Whereas there are also other policies that compensate for the entire such expenses that are incurred actually. Moreover these types of policies also offer a series of benefits, which can be utilized whenever you require them.

Few of the circumstances under which the insurance policy initiates reimbursing benefits

There are some of the predefined circumstances that are stated by different long term care insurance policies. One who fulfills or falls under those circumstances will be able to obtain benefits from these policies. These circumstances are as follows:

  • You must be incapable of accomplishing about 2-3 particular activities that are required in everyday life, without any sort of assistance from anyone around you. These activities consists like dressing up, bathing, going to toilet, eating, going from one place to the other or shifting from a chair to a bed and vice versa.
  • You must have faced cognitive injury which will make you eligible for getting benefits from such policies. There are many insurance policies that offer coverage for strokes, Parkinson's and Alzheimer's diseases. However patients having other types of mental disorders may not be eligible for getting coverage.
  • A doctor or specialist must announce your health condition as serious and therefore issue a medical certificate confirming the same. The doctor should also announce the requirement of long term care services for the treatment of your affected health condition.

Some of the incidents that must happen sooner than the policy initiate reimbursing the benefits

Before the long term care insurance policy initiates reimbursing the benefits, some of the following things that are described below must happen:

  • There are some age old long term care policies that bind you to stay in a hospital not less than 3 days, prior to the release of the benefits to you. Such a binding curbs your liberty in getting benefits, so better stay away from such policies.
  • A majority of the insurance policies formulates an elimination phase or waiting period. A waiting period commences from the day of your requirement for long term care services for the very first time and continues to remain till the policy offers. It must be noted that you will not get any benefits from the policy throughout the persistence of the waiting period. In case you manage to get well before the cessation of your waiting period, the policy will not compensate for the costs that are encountered for providing you care services throughout the waiting period. You will be able to get coverage for the costs encountered for the care services only after the waiting period ceases, in case you go on with getting care. Usually, the greater the span of the waiting period, the lesser the amount that you have to pay for the monthly premium of the insurance policy.

The time span for the persistence of the Benefit Period

The time duration for the persistence of the Benefit Period generally scales from 2 years to the entire span of life of a person. You will be able to cut your costs down on the monthly premiums of the policy, by choosing the coverage limit to remain for a time span of 3-4 years (as an alternative to stretching it to remain for the entire span of your life), longer than the normal time for which you have to stay in the nursing home.

The method of payouts by the long term care insurance policies: Compensation and Indemnity basis

There are a majority of the long term care policies that payouts on a Compensation basis equal to the cutoff point of the policy. This means they will pay only whenever any costs are incurred for providing long term care services to you. For instance, if you get a benefit of $150 each day, but require to payout $130 daily for a home long term care service giver, then your insurance policy will compensate you only the sum of $130 (as this is the exact cost incurred for providing you long term care services). The daily left out amount of $20, will get deposited into a storage of unexploited finances (it happens in case of only with a few of the policies), which can be utilized later to prolong the span of the time in favor of which the policy will reimburse the benefits.

However, there are some other types of long term care policies, which payouts on an Indemnity mode. Depending on the same instance as discussed above such a long term care insurance policy will reimburse $150 every day for the coverage of your long term care services. It may happen that the real costs have turned up lesser than the reimbursement made by the indemnity insurance, but still it would continue to pay you the entire benefit amount and not the exact costs only, that were incurred for giving you long term care services.

Safeguards against inflation

One of the most important attribute that a long term care insurance policy must possess for its customers is to safeguard their benefits and coverage against inflation. In case you are below the age of 65 years, then such an attribute is most essential for you when you purchase benefits, which you are not going to employ for a time period of 20 years or above than that. A long term care insurance policy that has excellent inflation stipulations amalgamates the benefits at the rate of 5% every year. If any policy doesn't provides safeguards against inflation, even at the rate of 3% per year, then it diminishes the every day buying strength of a $150 benefit, analogous to the value of $75.

Some of the other essential attributes of a long term care insurance policy

Apart from above attributes and characteristics mentioned above, a long term care insurance policy may have some of the other attributes and stipulations with it, which are discussed below:

  • 1=7 Elimination Phase: There are a few policies under which the customer (who has got the insurance), if has met the requirement for long term care costs on a single day within a 7 day time period, then the customer will be ascribed after he or she complies with the seven days with respect to the elimination phase. This type of attribute and stipulation reveals the procedure in which home care services is provided to the customer for several days, by the healthcare assistants and for the rest of the days by his/her in laws.
  • There are many long term care policies that come with fully assured renewable service. Such a type of service is provided by the insurance companies with these types of policies, with which they can renew the policies. But in this case, the rate of premiums that is to be paid per month may rise up, if they are boosted up for an overall section of insurance holders.
  • Some of the policy relieves you sometimes from paying any premiums, with the intention that no more premiums are unpaid, once you initiate availing the benefits.
  • Most of the insurance policies notify the third party associates (this may be your friends, family members, and your financial advisor), if in case you forget to make payment for the premium of the policy.
  • There are some states in USA that requires long term care insurance policies to come with no forfeiture benefits. Such a benefit stores a smaller amount of insurance in use, in case you allow the policy to expire.
  • Some of the insurance policies offer reinstatement of benefits, which makes sure that the highest amount of benefits is restored back to their original position, in case you avail the benefits for a while. You will be able to retrieve it back and opt for a particular period without availing any benefits. Generally this time period that you opt for is 6 months.

So be sure to concentrate on all the attributes and stipulations that come with a long term care policy. Keep them in mind while purchasing one for you.

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