More Information About Long-term Care Benefits
When the insurance policy covering long-term care benefits is bought, certain optional long-term care benefits must be offered. Depending on which state you live in the following options and/or policies must be offered: · Your long-term care benefits options must include insurance for Nursing Homes only.
· Your options and/or policies must also include insurance that covers home care only. · These long-term care benefits must make available insurance for both nursing home and home care, if needed. · There should be an option of inflation protection, meaning, your insurance policy will increase when living and health care expenses increase. Many insurance policies, especially those under the New York State Partnership for Long Term Care benefits, are required to have long-term care benefits that include protection against inflation. This type of inflation protection has a minimum requirement of a 5% raise in interest, compounded annually. One of the exceptions to this required benefit is if the policy after a certain age, which is usually around the age of 80. It is important to note that the long-term care benefits you purchase today may not be enough coverage in the future. One benefit that must be offered as an option with Long Term Care Insurance policies is called a non-forfeiture benefit. The forfeiture benefit is designed to ensure that, if your insurance payments fall into default, meaning you are not paying them after the amount of years specifically stated in your policy, you will be able to keep some benefits from your policy. Currently, the two most popular types of no forfeiture benefits being offered are a "Reduced Paid-Up Benefit" and a "Shortened Benefit Period." A brief description of these long-term care benefits follows: Daily Long-term care benefits do not always offer the coverage needed. In fact, most of the policies, covering long-term care benefits, currently being sold do not cover the full charge for a nursing facility or home health agency. Generally, imendietiey policies will only pay out specified daily limits. You must pay any charges above the daily benefit amount. Optional Benefits Reduced Paid-Up Benefit: If you purchase a reduced paid-up benefit, it will provide that, if after a specified number of years, you stop making payments on your policy, the policy will continue to reduce the daily benefit amounts (some insurers apply this no forfeiture benefit only to nursing home benefits). Shortened Benefit Period: A shortened benefit period will enable you to keep the original benefits offered with your plan if you stop making payments, until the no forfeiture benefit amount is exhausted. A similar no forfeiture benefit that was offered in the past was known as an "Extended Term Benefit". Basically, if you purchase a "Reduced Paid-Up Benefit" you will get reduced benefits and if you purchase a "Shortened Benefit Period" you will have full benefits for the specified reduced time. Any of the long-term care benefits, mentioned above, will cause your long-term care insurance policy to cost more. You should be prepared to pay for the coverage you need. |