Long-Term Care Insurance

Every long-term care policy is slightly different. Policies can vary regarding when coverage takes effect, how long benefits will last, and how much you will receive. Understanding the differences between policies as you compare options is important. This is why having a trusted Murphy Insurance professional is extremely valuable.

When Does Long-Term Care Insurance Take Effect?

Most policies have a “waiting” or “elimination” period that will apply before benefits start, ranging from days to a year. The length of this period will generally affect the premium price.
Also, policies generally require that certain criteria be met for the coverage to take effect and that you don’t necessarily start paying when you feel it is appropriate. It is essential for you to understand the criteria required for the policy you are considering before making a purchase.

Some standard criteria include:

• Doctor’s certification that a specific type of care is medically necessary.
• Demonstration of an inability to perform a certain number of daily living activities, i.e., getting in or out of bed, bathing, dressing, feeding oneself, etc. Failure to perform just one activity may not be enough; however, if you need long-term care or are disabled, multiple factors are often affected.
• Test of mental competence. This is required if a policy covers situations where dementia or other cognitive illness requires long-term care, even if the person can still perform daily functions.

Benefit Limits

Aspects that can differ significantly between policies and will impact the premium are:

• Maximum benefit limits – the total length of time and total dollar amount of coverage after which you need to make other arrangements for payment.
• Daily/monthly benefit limit – a specific amount that will be paid each day or month that long-term care is received, which requires additional costs to be paid out of pocket.

Understanding these factors is important as they can impact care, and they will be extremely important if you purchase long-term care insurance as part of an asset protection plan.

Eligibility and Other Considerations

• Eligibility. Your age and health can impact eligibility; therefore, if you are already ill or of advanced age, you may not find a policy for which you qualify or that you can afford.
• Co-Payments. Some plans will only pay part of the cost and require you to pay a portion of care costs. While this may require you to spend some of your funds, it can be significantly better than paying for everything on your own.
• Inflation Protection. The earlier you purchase a policy, the lower the premium. Keep in mind, however, that costs are always increasing, which may increase the importance that your policy has an “inflation protection” provision.
• Step-Down Provisions. Some policies offer this feature, which allows you to reduce the benefits you receive under the policy. Since premiums may rise over time, this can be an important feature that helps you afford a policy based on your income and needs.
• Third-Party Notice. Older adults who suffer from memory loss may miss a premium payment. This feature requires the long-term care insurance company to notify a specified third-party if a lapse in premium occurs before it can cancel a policy.
• Premium Waiver. If your policy doesn’t state that premiums are waived once you begin receiving benefits under a policy, you may have to continue to pay premiums while you are receiving care. If this is important to you, discuss it with your insurance professional.

NOTE:  This information is only a general description of the available coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements. Some coverage may be subject to individual insureds meeting underwriting qualifications and to availability within a state.   For further information, contact a Murphy Insurance Agency Professional.