Long Term Care Insurance

Almost everyone will need some type of long term care at some point. Long term care is many different services, far more than just nursing home care. Long term care includes help with daily activities at home, respite for a family caregiver, Adult Day Services, assisted living, as well as care in a nursing home.

The average cost for care in a nursing home in 1999 was about $40,000 per year ($109.59 per day). In 2010, at the current rate of inflation for nursing homes (6% per year), the total cost will grow to over $68,000 per year ($186.31 per day) and to over $121,000 per year in 2020 ($331.51 per day).

If you can afford long term care insurance, here is a worksheet you can use to determine if the policy you're considering meets your needs.

Long Term Care Insurance Worksheet
  Policy 1 Policy 2 Policy 3
1. Company name and policy
2. Deductible- elimination period:
    (waiting period- number of days)
3. Benefit daily amount paid:
    Nursing home care-
    Home care-
    Assisted living-
    Adult Day Services-
    Respite care-
4. Inflation adjustment:
    Inflation rate (%)
    Simple or compounded?
    Option to buy added amt.
    How often applied? (years)
    For how long?
    If not included, optional? amount?
5. Maximum amt. of benefits:
     (indicate in days or $ amount)
6. Requirements for coverage:
    Prior hospital stay? (Y/N)
    Medically necessary? (Y/N)
    How many limitations of everyday
    activities required?
    Which ADLs, how defined?
    Cognitive impairment? (Y/N)
    Does cognitive impairment have
    to be linked to ADL
    limits or medically necessary
    requirement? (Y/N)
7. Coverage for Alzheimer Disease:
    A type of cognitive impairment?
    Is coverage linked to ADLs or
    medically necessary requirement?
8. Pre-existing condition:
    Immediately covered if disclosed
    on insurance application?
    If not, definition is?
    Waiting period is?
9. Level of care: (Y/N)
    Home health aides?
    Assisted living?
    Adult Day Service?
    Respite care?
10. What is not covered?
11. Guaranteed renewable?
      (unconditional guarantee is
12. Premium levels?
13. Premiums waived if:
      In nursing home?
      Using at home care?
      Time period for waiver?
14. Company rating:
      A.M. Best-
      Standard & Poor's-
      Duff & Phelps-
15. Benefit amount:
      Benefit period-
16. Premium:
      Monthly amount $
      Annual amount $

Also, see our Web pages on Social Security & Income and Family Caregiving.

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