Nursing Home Long-Term Care Insurance
Americans are living longer. At the same time, they face greater risks of health problems from obesity, cancer and dementia. These and other health conditions may necessitate time in a long-term care facility, but, unfortunately, not many Americans are prepared for the expenses associated with this stay. Health insurance does not cover long-term care, but buying nursing home long-term care insurance may be difficult for those not knowing what to look for. Read on and learn some of the terms you run across as well as some of the common problems you might encounter when buying this kind of insurance.
Availability
You may apply for nursing home long-term care insurance by yourself or as part of a group. Employers offering comprehensive benefits oftentimes give their employees the option of signing up for this type of insurance product. Although it is not subsidized by the employer, the fact that it is offered to a group---rather than on an individual basis---makes it more cost effective and affordable.
Types
Nursing home long-term care insurance comes in two basic types: indemnity plans or integrated expenses plans.
Indemnity plans limit the payout of benefits to an agreed-upon daily figure, no matter how much money you or your family end up spending out of pocket. The lower the indemnity figure, the higher the amount you need to pay to make up the difference between actual cost and covered amount.
Integrated expense plans provide a complete payout at the onset but in the long run might have you facing some big bills. This kind of policy provides a preset overall spending limit, against which bills are submitted. As the amount of available coverage dwindles, the amount of money you may have to spend later on increases. For example, if you have an overall coverage of $100,000 and each day at a nursing home costs $100, you will have to pay for the full cost after 1,000 days. If you can find a cheaper venue where the stay only costs $75 per day, you do not have to pay until after day 1,333.
Considerations
CNN Money suggests purchasing policies that offer a compounding inflation option. These policies are more costly, but they also ensure that you are getting the full benefit you bargain for now, at the cost it will be in 10 or maybe even 20 years, when you actually need it.
Features
Nursing home long-term care insurance plans cover a variety of benefits, depending on the plan option you choose. Most plans offer coverage for nursing home care that may be offered in a custodial care facility, an adult daycare setting, an assisted living facility and also skilled nursing home care for dementia patients.
Warning
Read your policy very carefully. There are a number of events and care situations that are not always covered. Again, your level of benefit choice determines the exclusions, but by and large the most common exceptions from coverage are preexisting conditions that lead to a nursing home stay within a predetermined period of time from the start of the policy, usually 6 months or less. Moreover, make sure that your nursing home long-term care insurance policy does not specifically exclude Alzheimer's disease and other illnesses that commonly result in long-term care needs.
Expert Insight
The National Association of Insurance Commissioners urges consumers shopping for nursing home long-term care insurance to invite bids for the coverage they desire from a number of reputable companies and then spend the time to compare the fine print. You should pay special attention to the kinds of facilities the insurance will cover and those for which it will not make a benefit allocation.
Tags: long-term care, long-term care insurance, home long-term, care insurance, nursing home, nursing home, home long-term care