Using Long Term Care Insurance to Fight Healthcare Costs

Using Long Term Care Insurance to Fight Healthcare Costs - Part 2

2006-09-25

Back to Part 1 of Using Long Term Care Insurance to Fight Healthcare Costs

Through LTC insurance policies, one can eliminate the dependency and unwarranted stress that comes with relying on financial support from other family members, when the need for medical services arises. Benefits given to an LTC insurance policy holder may also qualify for an income tax deduction, based on his age.

There are indemnity insurance policies, as well as pooled policies. The former allots a fixed amount that can be spent over a certain period of time, say per day, week, or month. The policy holder shall then be reimbursed for his expenses. The latter type of policy provides for a maximum amount that can be allocated to different LTC services. Similar to the indemnity policy, there is a daily, weekly or monthly limit. The lower you spend, the longer your coverage would last.

Most financial planners recommend getting a plan that deals with benefits on a monthly basis, rather than a daily one. Going that route allows for more leeway in collecting benefits, if the level of expenses varies from day-to-day. It is also advised that a policy should encompass both home and nursing home care.

Long term insurance can be acquired through employers who avail of group packages for their personnel. Individuals can also get personal packages; such an option is better suited for the unemployed, self-employed or for those who work for smaller offices.

Choosing the best insurance policy is like shopping for a new car. You should consider what types of travel the vehicle will be used for, the color, make of engine, interior, type of fuel, tires, as well as the other built-in options and extra add-ons. By considering an LTC insurance policy early on in life, you gain the luxury of being able to orient yourself with the provider’s market stability and claims ratio. It also gives you the chance to carefully study the provisions for renewal and terms of cancellation. Coverage should remain stable even if the policy holder’s age or health changes throughout the duration of the policy.

Age plays a big factor in getting the best deal for the LTC insurance policy. The younger you are, the lower the risks to health, and thus the higher your chances of purchasing low premium packages. The time you wait for before the coverage begins also has an impact on the price of the policy. Pre-existing conditions should also be assessed as most insurance policies waive coverage of certain aspects of a person’s health status. It is likewise important to note that premiums and services differ per state.

Planning for the future is something that every person should not take for granted. Investing in one’s health is undeniably one of the keys to enjoying your tomorrow. With the availability of long term care insurance, the individual can breathe a little bit easier, knowing that he will receive the needed care, should his health demand it.

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