Long Term Care Insurance Policies: Reading the Fine Print

Long-term care insurance policies come with different coverage limits, conditions, and of course costs. It can become confusing trying to sort out which ones would be the best for you. What should you be looking for in LTI policies to make sure that you can make the best possible choice when purchasing these increasingly important, relevant insurance policies? Well, begin by shopping around and comparing prices. You can look online and you can talk to local brokers, financial planners, and insurance agents to get recommendations. But once you have some potential providers in your sights, there's much more to consider. The policy you are considering should very clearly state what it will cover and all of the terms and conditions contingent upon its paying out. You have to know exactly how your policy would work if you ever needed the kinds of services that it's designed to cover, for different policies are not all alike as I mentioned above. If you believe your policy will pay you more money than it actually will, if you don't realize that you have a waiting period before the insurance benefits will kick in, you would be in for a very rude surprise...and if you know that now, you might think twice about laying out premiums for a policy that doesn't really satisfy you.

Your LTI policy should not be one of the ones that requires you to spend time in a hospital before you can become eligible for your coverage. Salesmen will tell you that this stipulation keeps your premiums lower, but this is a rip-off of a policy and the few bucks you may save on premiums aren't worth it at all. This is a disguised way of trying to determine if you are "truly needy" and not wanting pay out unless it's absolutely necessary. Insurance companies have justified cause in mitigating adverse selection, but enough is enough. In addition, your policy should have just one deductible that holds for the life of the policy. Don't buy one that would have a shifting or variable deductible. Don't buy a policy that seems to have too many "outs" for the provider.

Your policy should always stay in force as long as you pay the premiums. That sounds like a no-brainer, but in other words you should not have a policy that could be canceled on you at any time just because the insurance company suddenly decides you're too high a risk or that it has too much LTI in force. There are some out there like that. Don't buy them.

You should also have a policy that allows you to stop paying premiums without any interruption in coverage or benefits once the policy starts paying out. You should also have a provision in the policy that allows you to decrease your premiums (and benefits, of course) if you can't afford the premiums you have now.

Your LTI policy should contain a provision for inflation protection in the form of either an automatic increase in your benefit on an yearly basis or the guaranteed right to increase your benefit.

Any good LTI policy will include coverage for dementia and at least one full year's worth of coverage for a stay in a nursing home or full-time home health care. If you are looking at a policy that does not include these things, don't buy it.

And at last, you should only buy a long-term care policy that gives you a guaranteed 30-day cancellation right from the time the policy is issued. This gives you the opportunity to thoroughly read through and review your policy to make sure you definitely are getting what you want.

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