The Process

Realizing the need for long term care is sometimes the hardest step in the process, but once you analyze your risk of needing long term care you should be ready to start the panning process. There will be different factors weighing in on your decision to purchase long term care insurance, for example:

Where would you like lo live when you retire?
Would you like to receive care at home?
How much of your long term care cost are you willing to self insure?

Benefit Amount

The benefit amount is the maximum amount your long term care insurance policy will pay out on a monthly or daily basis. As a rule of thumb you should research the cost of care where you would like to retire and receive care. You might be living in a high cost area now, but plan to retire to a lower cost of care location. Either way its very important to do your research so that you don’t end up buying a daily amount that is too not enough for the area where you plan on receiving care, as this can amount to much higher out of pocket expenses in the long run.

Benefit Period

This is the number of years that you would like your coverage to last. Most people select a minimum of three years, but generally less than 10 years. Selecting a reasonable benefit period will help you manage the cost of your long term care insurance policy.

Elimination Period – Deductible

To help bring down some of the costs of the policy, some insurance companies might require you to cover some of the cost of your care, this can be a certain dollar amount or a percentage of each claim, or the number of days you must pay for care before the policy benefits kick in.

Increases in Cost of Living

There are many strategies financial planners use in order to make sure their clients will have enough coverage to cover the increased cost of care 20 or 30 years from now. Don’t forget to tell your advisor that you are interested in inflation protection.

Optional Riders

Many long term care carriers offer a variety of optional riders you can use to customize the coverage to better meet your needs. Your long term care advisor can help you decide which ones, if any, might offer the most value for the extra premium you’ll pay.

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