1. The Long Term Care Insurance may be packaged with life insurance with either or feature which is very beneficial and flexible. In case of policy holder dies, their beneficiary will get the death benefit. While in case of policy holder wants Long term care, prior to his/her death than instead of life insurance predetermined benefits are paid. You can buy this type of policy by either paying the one time premium of $ 50,000 or more or with quarterly, yearly premiums.
2. The Long Term Care Insurance is packaged as rider to life insurance policy’s cash value. This type of policy covers two different types and the premiums are also divided to pay for both.
3. The Long Term Care Insurance may be packaged with disability income policy. It can be used before the age of 65years. This type of packaged policy is mainly for disability income but there are possibilities of long term coverage if premiums are paid after the age of 65.
4. The Long Term Care Insurance may be packaged with deferred annuity that has single premium option. This type of packaged policy is for those people who has around $ 50.000 or more money that is free and don’t mind if it is tied up.
There is pending legislation which if passed will make Long Term Care Insurance premiums exempted form tax.
What is Long term care?
The Long term care may be defined as when some one can not perform their emotional or physical needs without the help of other for extended time period than it is termed as Long term care. The external help required for activities like pain management, bathing, comfort and assurance, walking, toilet usage, meals providing, feeding, money management, phone answering, visiting doctor, shopping, taking medication, transport providing, laundry, grooming, paying bill, letter writings, small home repairs, yard maintaining, snow removing etc. are covered under Long term care. Able people take this type of activities for granted.
There are many reasons that are responsible for Long term care like disability, terminal condition, injury, illness, old age etc. It is found out that around 60 percentage of population require extended help during their life span. For some, the Long term care lasts for few days or weeks or months. But there are some persons for whom the Long term care goes for years. Depending upon the person’s condition they require different periods of care. The care may be divided in to two broad categories.
Ongoing Long term care: This type of care requirement is for extended period, may be for months or years. Ongoing Long term care is required when
1. Disabilities of permanent nature
2. medical conditions which are chronic
3. Daily routine require help
4. chronic pain
Temporary Long term care: This type of care requirement is for short period, may be only weeks or months. Temporary Long term care is required when
1. recovering from illness
2. Recovering from surgery
3. Recovering from injury
4. Terminal medical condition
5. Hospital stay for rehabilitation
The Long term care services may be given in an adult day servicing home, in the house of the patient, even in the house of patient’s friends or any of the family member’s house, in a board and care house or in a nursing home or many other such places.
Understanding Long Term Care Insurance benefits
Out of all insurance products the Long term care insurance is the most complicated health benefit product. The Long term care insurance provides around 16 options of different benefits. Out of this 16 options each option also offer 2 to 5 selections. The story does not end here, daily benefits gives other selections which may be rounded up to 30 in number. So theoretically there are hundreds or thousands of different policies possible in the same plan. With the results there is thousands of premiums combination. For lay man to grasp all this different combination of policy is very difficult.
So to make this thing simple, best way is to limit the choices. For example many employer will pre select only 2 to 4 different combination of benefit, and offer their employees only this with extra riders like inflation protection, shortened pay or non forfeiture. This procedure will leave thousands of options in to only 10 to 20. Many see advantages of this procedure but there are also some disadvantages.
Selecting from very limited options prevents many employees from selecting other batter and richer benefit plans. Some time it is also observed that limited number of benefits which is often proved to be inadequate. The obvious danger of offering limited benefit policy is employees may be under the false impression that they are covered for particular thing when actually they are not covered. For example to increase the employees’ participation rate they are offered incomplete protections which reduce the rate of premiums and superficially look very attractive. Some time initial payment may be lower but it increases as time passes.
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