Long term care insurance (LTC) can be a great way to cover long-term health costs. It can pay for care in a nursing home or a private home by a family member. The cost of LTC coverage can vary widely, depending on the individual’s age, gender, medical status, and location. There are several different types of policies available, including traditional, hybrid, and alternative. Some policies offer unlimited lifetime benefits, while others are limited to a specified period of time.
Most traditional long-term care insurance is sold through an insurance company. These companies must file products with the state insurance department. Each state has its own guidelines for approving insurance rates. For example, in Pennsylvania, an insurance company must receive approval for a premium rate before selling a policy. In some states, the Free Look Period is as short as 30 days.
While a lot of insurance companies offer traditional long-term care insurance, the prices are based on the experience of the insurer. This means that rates may rise or decrease in the future. They are also based on the individual’s age, marital status, and health. Married couples tend to pay less than single people.
Insurance agents can help you compare policies. However, unlike automobile insurance, they are not allowed to provide discounts or special deals. As a result, most policyholders will not be able to afford the best long-term care policies.
Long-term care insurance companies have strict underwriting standards. If a person is considered high risk, their premiums will be higher. People with chronic health conditions are also likely to have higher premiums. Women are more likely to need long-term care, so they have to pay more than men for insurance.
Many individuals with pre-existing medical conditions are unable to obtain a standard policy. Depending on the insurance carrier, a person with preferred health may be able to get a discounted rate. Other applicants have to pay the standard rate.
Individuals with limited income, savings, or other assets need to consider other options. Medicaid is a government-funded program that is designed to assist people in poverty. Although it can provide support for some households, it only covers certain expenses. Normally, assets would need to be spent down before a household qualifies for Medicaid.
Individuals who purchase a hybrid policy have the flexibility to pay for the plan over a five, ten, or 20-year period. Premiums can be as low as $60 or as high as $200. Hybrid policies are more expensive than traditional plans.
Traditional long-term care insurance is similar to car insurance. An individual will pay an annual premium to ensure that their needs will be covered. In addition to premiums, policyholders will have to pay for the care during the elimination period. A few insurance carriers allow you to buy additional benefits, but the premiums can increase as the benefits do.
Choosing a policy is a complicated process. Before purchasing a policy, you should consult a financial planner. He or she can advise you on the type of long-term care insurance that will suit your needs.