Shopper's Guide To Long Term Care Insurance
Federal Government
Federal and U.S. Postal Service employees and annuitants, members and retired
members of the uniformed services, and qualified relatives of any of these are eligible
to apply for long term care insurance coverage under the Federal Long Term Care
Insurance Program. Private insurance companies underwrite the insurance, and the
federal government does not pay any of the premiums. The group rates under this
program may or may not be lower than individual rates, and the benefits may also be
different.
State Government
If you or a member of your family is a state or public employee or retiree, you may
be able to buy long term care insurance under a state government program.
Association Policies
Many associations let insurance companies and agents offer long-term care
insurance to their members. These policies are like other types of long-term care
insurance and typically require medical underwriting. Like employer-group policies,
association policies usually give their members a choice of benefit options. In most
cases, policies sold through associations must let members keep or convert their
coverage after leaving the association. Be careful about joining an association just to
buy any insurance coverage. Review your rights if the policy is terminated or canceled.
Policies Sponsored by Continuing Care Retirement Communities
Many Continuing Care Retirement Communities (CCRC) offer or require you to
buy long term care insurance. A CCRC is a retirement complex that offers a broad range
of services and levels of care. You must be a resident or on the waiting list of a CCRC
and meet the insurance company’s medical requirements to buy its long-term care
insurance policy. The coverage will be similar to other group or individual policies.
Life Insurance Policies
Some companies let you use your life insurance death benefit to pay for specific
conditions such as terminal illness or for qualified long-term care expenses such as
home health care, assisted living or nursing home care. A life insurance death benefit
you use while you are alive is known as an accelerated death benefit. A life insurance
policy that uses an accelerated death benefit to pay for long-term care expenses may
also be known as a “life/long-term care” policy. It may be an individual or a group life
insurance policy. The company pays you the actual charges for care when you receive
long-term care services, but no more than a certain percent of the policy’s death benefit per day or per month. Policies may pay part or all of the death benefit for
qualified long-term care expenses. Some companies let you buy more long-term care
coverage than the amount of your death benefit in the form of a rider.
Some policies may allow you to withdraw the cash value of your policy to pay for specific conditions and expenses. It is important to remember that if you use money from your life insurance policy to pay for long-term care, it will reduce the death benefit the beneficiary will get. For example, if you buy a policy with a $100,000 death benefit, using $60,000 for long-term care will cut the death benefit of your policy to $40,000. It may also affect the cash value of your policy. Ask your agent how this may affect other aspects of your life insurance policy. If you bought life insurance to meet a specific need after your death, your survivors may not be able to meet that need if you use your policy to pay for long-term care. If you never use the long-term care benefit, the policy will pay the full death benefit to your beneficiary.
Long Term Care Insurance Shoppers Guide Table of Contents
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