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What Is LTC Insurance?
Depending on your age, finances, and personal situation, there are different options available to help you pay for LTC costs. One option growing in popularity is LTC insurance. You can buy LTC insurance coverage to help cover LTC costs you may incur in the future.
In general, a quality LTC insurance plan will let you choose:
- Coverage most appropriate to your situation.
- Your level of coverage (your Daily Benefit Amount).
- An option to help offset cost increases due to inflation.
The Features of a Quality LTC Insurance Plan
To help you better understand what to look for in LTC insurance coverage, here's a list of important insurance plan features, developed by The National Association of Insurance Commissioners (NAIC):
- At least one year of nursing home or home health care coverage, including intermediate and custodial care. Nursing home or home health care benefits should not be limited primarily to skilled care.
- Coverage for Alzheimer's disease, should you develop the disease after buying the coverage.
- An inflation-protection program. Look for LTC coverage that lets you choose from these options: automatically increasing the initial benefit level on an annual basis; a guaranteed right to increase benefit levels periodically without providing proof of good health satisfactory to the insurer; or covering a specific percentage of actual or reasonable charges.
- A guarantee that the insurance plan cannot be canceled, non-renewed, or otherwise terminated because you get older or suffer deterioration in physical or mental health (such coverage is called "guaranteed renewable").
- The right to return the insurance plan within 30 days for any reason. This is called a “30-day free look.”
- No requirement that insurance plan holders must first:
- Be hospitalized in order to receive nursing home benefits or home health care benefits.
- Receive skilled nursing home care before receiving intermediate or custodial nursing home care.
- Receive nursing home care before receiving benefits for home health care.
Ask Yourself These Questions
If you have done your homework and have settled on LTC insurance as your best option for meeting potential future LTC costs, you are ready to move to the next important step—making sure the coverage you obtain is right for your needs. To help make sure your decision is a sound one, you may want to ask yourself, your insurance agent, and your potential LTC insurance providers these questions:
- Where do I expect to receive LTC (since costs vary by region)?
- Is the potential impact of inflation something I have factored into my projected costs?
- What happens if I develop Alzheimer's disease? (Ask if the insurance plan offers Alzheimer's coverage if the disease is developed after the coverage is purchased.)
- Does the insurance plan have a “30-day free look” feature?
- Does my insurance plan have the flexibility to be adapted if a new service or technology becomes available in the future? (Ask about whether the coverage offers an Alternate Plan of Care Benefit.)
Prudential offers quality LTC insurance plans. Learn more about us and our LTC insurance plans. |
