It’s common for people to avoid buying long-term care insurance because they believe the process is too confusing or complicated. However, investing in a long-term care policy only requires making four simple decisions, which include choosing a maximum benefit, a monthly benefit, an inflation feature and the elimination period.
Plans are based on a maximum benefit, which is the total amount a policy will pay out. For example, consumers may choose to purchase a plan for $100,000 or $250,000 in care. This number is usually based on the period of time benefits will be received, such as one, three or five years.
The next decision involves picking a monthly benefit. This is the amount the insurance company will pay out monthly or daily. The majority of policyholders elect to receive anywhere between $3000 and $6000 in monthly benefits in response to the current average costs of home care and facility care.
After the maximum and monthly benefits have been determined, consumers should consider inflation protection. Adding this feature helps benefits grow to better stay current with future costs of care.
The final decision is the elimination period, also known as the deductible or waiting period. This is equivalent to a period of time. For example, if a 90-day elimination period is selected, the policyholder will be responsible for the full cost of their care for the first 90 days it’s needed. While often a little more expensive, many policyholders opt for a zero day elimination period which allows them to start using their policy as soon as they become benefit eligible.
Long term care insurance will never cost less than it does today. Contact us today for a no-cost, no obligation consultation on your long-term care planning options.