Should You Get Long Term Care Insurance

At some point in life, people need and will always need care. This need does not cover any age group, as people have their own reasons why they would need assistance. Long term care insurance or LTCI is an insurance product sold in Canada, Germany, the United States, and in the UK to cover services that are not roofed by health insurance plans.

It is important to understand that this type of insurance is not limited to sick people, but those who have difficulties in doing daily activities. Examples of these activities are eating, bathing, dressing, walking, drinking and the like. Many people disregard the idea of getting insurance plans when they are young. The masses think that insurance plans are only for the rich and unnecessary in their lives. These things are not true because there are many benefits that can be obtained with insurance plans.

The benefits of LTC insurance are numerous. One good example is living in a hospice care home. Elderly people who plan to spend their days in nursing homes can sleep worry free because their insurance plans can pay for their personal nurses, as well as their lodging.

Wise individuals invest in insurance services such as LTCI because they are aware that they will not be as strong as they are through their entire lives. Elderly people with such plans do not need to rely on their children and can have shelter even after retirement because they don’t have to fear bankruptcy.

When getting LTC, it is important to seek expert advice. Some individuals are not aware of the coverage of their plans or how they will be able to use it. Some purchase policies but are unable to use their plans in the end because they fail to pay continuously, as required by most insurance companies.

On the good side, those who are able to pay fully for their plans can renew their private policies for life. It cannot be canceled for health reasons, since no one can tell when someone will need long term care. Mishaps can happen anytime and old age can never be prevented, too.

There are two types of private LTCs. The first one is Tax Qualified Policy or TQ, while the second one is Non-Tax Qualified Policy or NTQ. The former requires the plan holder to be in a state where he or she is unable to perform daily activities such as eating, transferring, walking and the like for at least ninety days. This may be due to cognitive impairment or other medical conditions. A doctor’s recommendation is necessary for this to be approved. Once approved, the beneficiary will receive the care needed, tax-free. The latter policy also requires the recipient to have medical records showing he or she cannot perform one or two daily activities, such as eating and bathing. However, this policy is a little vague and not preferred by many because the recipients may later on receive tax bills for the benefits received.

There are other options made available in the market today. Some of the new policies are reimbursement-based plans and group policies. Most companies that offer benefits based on reimbursement are offered in the United States, while there are also other companies overseas that offer similar plans, covering only nursing care. Group policies can be cancelled in time and are not renewable. They may be replaced though, with similar plans offered by insurance companies.

Most insurance companies offer various premium payment modes for LTCI holders. These are yearly, bi-yearly, quarterly, and monthly. They may also add a percentage for repeated payments than annual. Opportunities like non-forfeiture, spousal survivorship, return of premium, and restoration of benefits have been made available by most insurance companies today to attract more clients.

People who are receiving or may soon receive Medicaid benefits are not advised to buy long term care insurance. Those who have limited assets and can’t afford the premiums are also not encouraged to invest in LTCIs. People whose only sources of income are social security benefits may instead purchase regular insurance plans or stick with the benefits that they have. According to experts, people should not spend more than 7% of their savings on LTC insurance plans.

Before spending money on LTC, be sure to think about it, or at least talk to people who know more about it. Some may be good to have it, while some are better without it. Kerry Hannon, a contributor from www.forbes.com shared her story about her father who passed away at the age of ninety-four. They didn’t purchase LTC insurance, so had to pay at least 5000 USD a month from their own pockets, for his stay in a special facility. Consider these things and consult an expert to help you make the right decision, if you are planning to get one.