Benefits of Long Term Care Insurance
What are the benefits of Long Term Care Insurance?
In America, each year, the purchase of Long Term Care Insurance runs into a million. Over the years policies have included more benefits, as a result of which you now have flexibility over how to use these benefits and from where you want to avail of them.
Qualifying for benefits of Long Term Care Insurance
An individual qualifies to start receiving benefits from a long-term care plan if he/she fails to perform a set of “Activities of Daily Living” or damages his cognitive power due to dementia or Alzheimer’s disease.
Benefits included in Long Term Care Insurance
- Care Coordinator – Pay for a registered nurse or a licensed social volunteer known as a ‘professional care coordinator’
- Home Adaptation – Pay for medically exigent modifications, like wheelchair ramps, hand rails, and grab bars, bath and shower alterations.
- Caregiver Training – Pay to informal caregivers to undergo procedural care- giving training of long-term care beneficiary.
Other benefits include
- Premium Waiver – Once a person qualifies to receive benefits, the mandatory pay of the premium for long-term care coverage ceases.
- Bed Reservation Benefit – In the event that a care-receiver has to visit the hospital, the policy pays room and boarding charges temporarily.
- Restoration of Benefit – Original benefit amount is restored if a policy holder does not require care for a certain period after having gone through a phase in which he/she required the benefits and then stopped receiving care before the limit on maximum benefits entitled was reached.
Optional benefits include
- Protection from inflation
- Continuation of policy in case of failure to pay premiums, though at limited benefit. Waiving off premiums in a joint policy once one of the policy holders qualifies for benefits.
Important information regarding premiums, their taxability and cancellation of Long Term Care Insurance
- Premium Payment: You can pay for the premiums monthly, quarterly or annually. Some carriers have come up with modified payment plans, which require you to pay for premiums for a certain number of years, after which the entire amount of the policy is paid at one go. These are referred to as “limited pay products”.
- Increment of Premium: Generally a carrier cannot increase your premiums based on the status of your health or age, though they may be granted permission by the state insurance commissioner to charge higher rates for a class of policy holders.
- Coverage Cancellation: You can cancel your long-term policy any time. The insurer has the discretion to cancel or retain your policy if you fail to pay your premium.
- Taxability of Long Term Care Insurance: Premiums for Long Term Care Insurance which meet the criteria of federally tax qualified plans are tax deductible.
By insuring your long-term care needs you would be bringing down these medial expenses to a manageable amount, ensuring that you get care in the manner that “you prefer” and in a location of your choice.