Long Term Care Insurance
Policy and Benefit Choices

The following is a summary of LTC Insurance Policy and benefit choices:

You select a daily benefit amount (for example, $100/day), which represents how much of the expenses for care the LTC policy will pay. Most policies let you choose from $50/day to as much as $500/day.

Often you can choose whether you want the LTC Insurance Policy to pay the same daily benefit amount for care in all settings, or whether you want the policy to pay less for care in less costly settings (such as home care).

Common choices include a home care benefit of 50 percent or 75 percent of the daily nursing home benefit amount.

With long-term care insurance, you pay premiums in amounts you know in advance and can budget for, and the policy pays - up to its coverage limit - for the long-term care you need when you need it. Typically premiums are waived during the time you are receiving benefits.

You choose a Maximum Lifetime Benefit or total lifetime amount you want the policy to provide.

Policies typically offer a choice of lifetime dollar amounts - for example $100,000 or $300,000. The dollar amounts may correspond to a period of time. For example, a three-year policy at $100/day of benefits would provide you with $109,500 worth of care. Some insurers also sell "Lifetime" or "Unlimited" coverage that has no dollar limit; you receive benefits as long as you continue to need long-term care and receive covered services.

You choose the type of coverage you prefer - "comprehensive" or "facility care only."

Most policies today are comprehensive, but some people prefer to buy facility-care-only policies. These pay for care in a nursing home or assisted living facility, but not for care at home or in the community. These policies may still include hospice or respite care. Facility-care-only policies cost less than comprehensive policies, and if people prefer and have family or friends to provide care at home, they may only have the policy to reimburse them for paid care in a facility if and when they need it.

Many policies offer additional optional benefits or "riders" allowing you to customize the coverage. One important option is Inflation Protection, which helps protect you from the rising cost of care over time. It works the same way that an inflation clause on your homeowners' insurance works: As the cost of replacing your home increases, so does the amount of insurance coverage that you maintain on the home.

There are many different types of Inflation Protection in long-term care insurance. Be sure to find out more about Inflation Protection options in any policy you are considering.
Many policies offer benefits in a variety of settings, such as your home, an adult day care center, an assisted living community, or a nursing home.

Age is not a determining factor in needing long-term care. About 40% of those receiving long-term care are between 18 and 64. The late actor Christopher Reeve who in 1995 at age 42 became paralyzed following an equestrian accident and required 9 years of long-term care. Once a health condition occurs long-term care insurance may not be available. Early onset (before age 65) Alzheimer's and Parkinson's are rare but do occur. Michael J. Fox was 30 when diagnosed with Parkinson's.