Long term care insurance first started to appear in the 1960’s. Back then it was created to help pay the costs of nursing home care. These insurance policies were sort of like car insurance. You bought them but you hoped you never needed them. Like car insurance, if you never made a claim, all the premiums you paid were gone. Long term care premiums however are much more expensive than car insurance premium.
There are still many policies out there that will only pay for nursing home care. If you have not looked at your policy since you first bought it, now is a good time to take a look at so you understand some basics about its benefits. The way long term care is delivered has changed a lot in the last 20-30 years. Some of the ways that care is provided were not imagined when those older policies were issued so the care you want or need may not be covered.
Assisted living in its earliest form did not start until the mid 1980’s and has only had its boom time in the last 10-15 years. As a result, many long-term care policies before that may not cover cost in assisted livings.
In reviewing your policy understand:
If and how these services are covered:
- Nursing Home Care
- Assisted Living Care
- Adult day care services
- Home care services
- Home modifications
- Care coordination
Financial Coverage amounts and maximums:
- Daily benefit if in a nursing home ($300 daily amount may only be part of your cost)
- Daily benefit if in an assisted living ($150 daily amount may only be part of your cost)
- Maximum adult day care visits per week and daily maximum cost
- Daily benefit for home care services
- Maximum home modification benefit and what types of changes are included
- What is the maximum lifetime policy payout ($250,000 or $500,000 no maximum)
(if you have a $250,000 lifetime maximum and a $6000 a month assisted living bill, it will pay for about 3.4 years)
Finally, you will want to understand what triggers the benefits to start. It is often needing help with a certain number of ADLs (activities of daily living). This is where there was an issue with one family members policy. He never needed help with enough things for the policy to start paying. Also, what is the elimination period or waiting period before benefits will pay?
People have often been surprised, when they need to use their policy, that it does not cover what they need or want at the time. If you go through the review above, you will be better informed about some of the key features.