We’d like to share a story from the LA Times that goes in-depth on a popular topic these days in End-of-Life planning: long-term healthcare insurance.
What is long-term health insurance exactly? It’s what pays for End-of-Life care that isn’t specifically medical in nature, like at-home care or care in a nursing home or assisted living facility.
Most people hope they will never need it but if you live a long life, chances are, you will. The U.S. Department of Health and Human Services speculates nearly 70% of Americans over 65 will require some form of it.
Here are some suggestions from experts about what to consider when buying long-term care insurance.
Age And Health Matter
Buy early. The younger you are, the less expensive it will be. Unlike the Affordable Care Act, long-term care insurance is not guaranteed. If you already have a chronic condition, you’re likely to be turned down.
Some Coverage is Better Than None
When purchasing it, “I advocate what I call a ‘good-better-best’ approach,” said Jesse Slome, executive director of the American Association for Long-Term Care Insurance.
Good | Buy a policy that guarantees some coverage, even if it won’t pay for all your needs.
Better | Buy a plan that gives you the option to add benefits for better coverage later on.
Best | Buy a comprehensive policy that keeps up with inflation.
Know What It Pays For
All policies require proof of how many daily living activities you need help with before agreeing to cover the costs. “That’s the number one detail to look for,” said Craig Gussin, principal of San Diego-based Auerbach & Gussin Insurance and Financial Services. He suggests you buy a policy that kicks in once you need help with one or two activities of daily living.
Know When Coverage Starts
Most policies have a waiting period where you have to pay for long-term care services yourself before the insurance kicks in. “Is that 30 days? 60 days? 90 days? The longer the period, the more you’re privately paying, so the cheaper the premium,” said Ruth Phelps, a Pasadena elder care attorney.
Know How Your Policy Pays Benefits
Some policies pay a lump sum while others require you to submit expenses and then reimburse you. “Dropping your policy often means you lose all the money you’ve already paid into it. You can expect it to be canceled if you’re about 45 days late on your payment,” Gussin said.
Pick a Good Agent
It’s important you work with an experienced agent. Here are three questions to ask before agreeing on a policy.
- . How many years have they been selling it? “It takes at least three years for people to understand the industry,” Gussin said.
- . How many people has the agent sold long-term care insurance to? “People think insurance is insurance, but this is like brain surgery. I don’t want to go to a brain surgeon if I’m his second patient,” Slome said.
- . Find out how many insurers the agent works with. “Agents are only going to recommend the companies where they can earn a commission,” Slome said. Find an agent that works with a minimum of three or four companies.
Read the story here.