Majority of long term care insurance policies that offer updated products come with three components. These are the benefit period, the benefit amount, and elimination period. The aforementioned elements are very flexible to the extent that it is possible to customize them for each policy owner’s needs. Since a lot of companies offer long term insurance care, expect variations in the policies that you will encounter. Rules and regulations are also unique to every insurance carrier. Even so, the main characteristics of the three components are relatively similar no matter where you avail of the insurance plan.
Among these terms, the most important component would have to be the benefit period. It indicates the length of time or for how long an individual shall continue to receive benefits. In the United States, an average stay in a nursing home is between two to three years. Financial experts also recommend availing of a benefit period that doesn’t exceed three years. A good number of LTC (Long Term Care) companies have policies that provide coverage for up to two years. There is an option to extend the coverage for up to five years. It is also possible to change the entire duration and opt for lifetime coverage instead. Naturally, the longer an individual would like to have coverage means that premiums will also be higher. Everyone has different needs and circumstances that is why these components are flexible.
The benefit amount will be handed after the elimination period. Upon completion of the elimination period, this will sum will be used to cover the expenses of the person’s care. It can be given on a monthly or daily basis. The daily cost for a person residing in an assisted living facility like a nursing home averages about $200. The going rate is even higher for major states and cities like Washington, California and Texas.
Calculating how much is needed for the benefit period can be quite tasking because most of us are not updated when it comes to current prices for nursing homes and similar care facilities. A common mistake is to quote an amount that is too high or too low for the services. It is important for the benefit amount to complement the actual cost in order to avoid expensive mistakes.
Elimination period refers to the number of days that a policy holder will personally pay for expenses before the insurer starts to shoulder the cost. There are varied preferences when it comes to this as indicated by the available ranges. It can be 0 days, 30-60 days, 90 days, 180 or 365 days. There is one rule that is followed. The longer an individual pays for the costs, the lower premium rates will be. Bear in mind the current and future state of your financial resources.
These three components must be tailored to your financial capability and needs. If your insurer allows you to design your own long term care policy, it can be advantageous, if it is planned well. For people with no prior knowledge or background on the subject, seek help from experts.