What You Should Look for in a
Good Long Term Care Policy

If you do make the decision to buy the insurance, you want to make sure you get the coverage you need. Here's what to look for in the policies:

Cost of Living Adjustment (COLA)

This is especially important if you are likely to have the policy for a while. If your maximum daily benefit does not keep up with inflation, you could be paying a lot of money for a policy that provides a fraction of the coverage you will need 10 or 15 years from now.

Home Care

The policy should cover custodial care expenses incurred in your home. This home health care benefit is usually sold as a percentage of the maximum daily benefit in nursing homes.

Some experts counsel that this home benefit should be the same as the nursing home benefit because residential care is not necessarily cheaper than nursing home care. In addition, remember that if you move into a nursing home, the maintenance costs at your residence may be substantially reduced. Talk to your agent to determine what is best for you in terms of home care benefits given your residential circumstances.

No Hospitalization Requirement

Make sure the policy does not require a hospital stay before the benefits kick in. More than 60% of nursing home residents aren't hospitalized prior to being admitted to a longterm care facility.

Benefit Triggers

The policy should go into effect if you are unable to perform one or more "activities of daily living."

Dementia Included

The policy should provide coverage for "cognitive impairment," whether it is because of Alzheimer's or some other form of dementia.

When choosing a long term care policy, you must consider your financial situation and whether you can afford the policy you want/need.

Consumer TIP: Take the time to talk to an agent who is an expert in long term care coverage and who can assess what policy will adequately fill your needs.

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