Long-Term Care Insurance: Is it Right for You?
Source: AARP.org | March 2, 2007
AARP Offers Tips and Resources to Help You Decide If You Should Buy Long-Term Care Insurance
Each year about seven million Americans receive some type of help with long-term care. Long-term care includes a wide range of services and can be provided in homes, in the community, assisted living facilities, or nursing homes. Depending on the care needs and living arrangements, long-term care services can be costly. There are many factors to consider in deciding whether long-term care insurance is right for you.
Tips to Help You to Decide If You Should Buy
- If your income is low or will become low and you have few assets, investing in long-term care insurance may not make sense because you may qualify financially for Medicaid.
- You may have family and friends who can help with long-term care. Some insurance policies will allow you to pay family and friends to help with your long-term care.
- You may have enough money to cover out-of-pocket expenses for long-term care. You may want to discuss this with a financial advisor or lawyer.
Tips to Help You Decide When to Buy
- Companies may offer discounts if you purchase the policy when you are in good health.
- If you already have a serious condition or you need help with daily activities, you may be denied long-term care insurance. Ask for an informal opinion before you fill out the application.
- You will have to decide when to buy based on your health, family medical history, your needs, finances, lifestyle, and other factors.
Tips to Help You Start to Look for Coverage
- You can get free health insurance counseling from the state's health insurance assistance program, SHINE (Serving Health Information Needs of Elders), online or by calling toll-free 1-800-AGE-INFO.
- Contact the Commonwealth's Division of Insurance for a list of long-term care insurance policies approved for sale in Massachusetts online or by calling 617-521-7777.
Tips to Help You Choose the Right Options
Different policies offer different coverage options. It is a good idea to purchase a comprehensive policy with flexible options.
The different options may include:
- Nursing Home Care
- Assisted Living
- Adult Day Services
- Home Care
Tips to Help You Once You Have Decided to Buy
Once you have decided to buy a long-term care insurance policy, read the policy carefully before you sign. Never pay for a policy in cash and always make the check payable to the company. Nearly all states, including Massachusetts, require that insurance companies give you a 30-day "free-look" period, which begins after you receive the signed policy. During this period, you can return a policy and receive a full refund.
Most policies have certain things in common that you should know about, which include:
- Daily Benefit. The amount the insurance company will pay each day you qualify for benefit.
- Benefit Period. The length of your coverage, usually one year to lifetime.
- Elimination Period. The number of days you must pay out-of-pocket before the insurance begins to pay, after it is determined you are in need of services.
- Benefit Triggers. The conditions that decide whether and when you receive benefit payments.
- Inflation Protection. This increases the benefit amount of your coverage to keep up with the increase in costs of services over the years.
Consumer Resources
For additional information on long-term care insurance, call 1-800-AGE-INFO. You will be connected with SHINE through this toll-free number. Find a consumer guide on long-term care insurance online or call 617-521-7777.
Make Your Voice Heard
AARP is working in Massachusetts to ensure stronger protections for consumers when it comes to comparing and buying long-term care insurance. Help us persuade state legislators to add safeguards for consumers. To make a difference, call 1-866-448-3621 or e-mail us.
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