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Considerations when buying a insurance policy
Here are some points to keep in mind as you shop.
Always check with several companies and agents
Is it wise to contact several companies (and agents) before you buy. Be sure to compare benefits, the types of facilities you have to be in to receive coverage, the limitations of coverage, the exclusions, and, or course, the premiums. (Policies that provide identical coverage and benefits may not necessarily cost the same.)
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If my sister performs the service in my home, Will the policy provide the benefits?
Most policies will not pay benefits when family members perform home care services. However, some policies include services performed by certain licensed family members.
Are long term care policies standardized like medicare (medigap) supplements?
No! There are significant differences in policies from company to company, and from state to state even with the same company. Also, definitions of such terms as skilled care and custodial care may vary from policy to policy.
What happens if I make a mistake on the application?
It is important to be accurate and thorough when you complete the application for long term care insurance. If a company relies on that information (or lack of information) to issue a policy, learning of a misstatement could lead the company to cancel the policy and return the premiums. This can generally only occur in the first two years after purchase; however, a fraudulent misstatement might result in cancellation at any time.
What happens to the medical information from my application?
Such information remains confidential. It may be shared with other insurance companies, however, if you apply for insurance with them.
Yes. In this regard, applying for long term care is similar to applying for personal life insurance.
What about pre-existing conditions?
Most companies will issue a policy to someone who has a relatively minor pre-existing condition. However, benefits may be denied during a "pre-existing condition period" that can vary in length from company to company.
Will I have to be examined by a doctor to buy long-term insurance?
Not necessarily. In many instances, you will merely need to be interviewed about your medical history and current health, in addition to authorizing a release of your medical records for review by the insurance company.
What is a cognitive impairment?
The most common example of a cognitive impairment is Alzheimer's disease. Such impairments are characterized by the substantial supervision that a person might need to protect himself or others because of his loss of memory, orientation, or the ability to reason.
In order to receive benefits, two or three factors must be considered. First, you require assistance with the (activities of daily living) the "ADL(s)" or "cognitive impairment(s)." Those conditions trigger benefits. Second, you must satisfy the "elimination period". Finally, if you do not have a "comprehensive policy", you must receive assistance in a nursing home or similar facility.
How does a comprehensive policy differ from a non-comprehensive one?
In a comprehensive policy, benefits are paid for service delivered in nursing facilities, assisted living facilities, adult day care centers, or at home. However, you may elect a reduced level of benefits for care received outside of a nursing home. A non-comprehensive policy restricts the benefits to services that are provided in nursing facilities.
What services are typically not covered?
Those with mental illness (excluding Alzheimer's) are generally excluded from coverage, as are those addicted to alcohol or drugs, those who have attempted suicide, and those who have a self-inflicted injury or an illness or injury caused by an act of war. Also, policies generally exclude those who have had treatment already paid for by the government.
What activities are included in the adls (activities of daily living)?
Technically, ADLs refer to the triggers that would indicate that benefits might become payable. The broadest definition would include ambulating (walking), bathing, continence, dressing, eating, transferring to or from a bed or wheel chair, and using toilet facilities. The actual ADL's that are considered and the number needed to trigger benefits vary from policy to policy.
What kind of care is covered by long term care policies?
Covered expenses can vary from policy to policy. In a comprehensive policy, benefits are paid for services delivered in nursing facilities, assisted living facilities, adult day care centers, or at home. A non-comprehensive policy restricts the benefits to services that are provided in nursing facilities. Care is further subdivided into skilled care and custodial care. Skilled care is generally ordered by a physician under a plan of treatment, and is provided 24 hours a day. It is usually provided in a nursing home. Personal care or custodial care helps a person perform ADLs (activities of daily living) -- assistance that can be provided in almost any setting.
Who should buy long-term care insurance?
Long-term care insurance policy is not for everyone. For a limited population, long-term care policy makes sense as an affordable and worthwhile form of insurance. Buying long-term coverage should not cause financial hardship and force you to forego other financial needs. Whether long-term care insurance is appropriate requires a full financial analysis. For many people it is not a good idea.
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The answer is simple: it comes from your cash and your assets, your family's assets and for those without assets it is paid by Medicaid programs administered by state government. More than half of nursing home bills are paid out-of-pocket by individuals and their families, and somewhat less than half are paid by state Medicaid programs. Insurance, and that includes Medicare, Medicare supplemental coverage and health insurance provided by employers, does not pay for most long-term care expenses.
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Introduction of long-term insurance
When a consumer buys a fire insurance policy on their home they are betting in favor of a potential risk that most probably will not occur. To appreciate the rareness of a home fire consider all the times you have driven through your neighborhood or have flown into a major city. The number of house fires commonly encountered is rare. But if one does occur, it is a total financial catastrophe for most people. For that reason fire insurance policies are common. This is classic case of insurance at its best: everyone pays a small premium and in return receives the assurance they will not bear the full burden of a rare catastrophe.
Considerations when buying a insurance policy
Here are some points to keep in mind as you shop.
Always check with several companies and agents
Is it wise to contact several companies (and agents) before you buy. Be sure to compare benefits, the types of facilities you have to be in to receive coverage, the limitations of coverage, the exclusions, and, or course, the premiums. (Policies that provide identical coverage and benefits may not necessarily cost the same.)
Continue reading "Considerations when buying a insurance policy" »
If my sister performs the service in my home, Will the policy provide the benefits?
Most policies will not pay benefits when family members perform home care services. However, some policies include services performed by certain licensed family members.