You may be looking at long term care as if it is as simple as buying your child a piece of candy from a store. Bad news is you are getting it all wrong. Long term care is not as straightforward as it may seem. There are a lot of underlying factors and considerations behind it which everyone must never overlook.
To aid you through your journey in getting LTC may it be for yourself, parents, relative or friends, here are some guidelines to take a look at first before jumping into uncertain decisions which, in some way, might lead you to a pool of problems ahead.
First on the list is determining if you are eligible to long term care. If you are in reasonably good health and can take care of yourself and if you are aged between 18 and 84, you may be able to purchase insurance for long-term care. Some companies do not sell individual policies to people under 18 years of age or older than 84. Age restrictions apply only to their age at the time of purchase, not when you use the benefits.
Second is assuring non-forfeiture of benefits. This brings some benefits to policyholders of their reimbursement if they decide to drop their coverage. Nowadays, most companies offer this option and the most common types of non-forfeiture benefits offered are “return of premium” or a “shortened benefit period.”
With the return of premium, the insured receives money, usually a percentage of total premiums to the date of withdrawal or death. With shortened benefit period, the long-term care coverage continues but the benefit period or the amount of time is reduced as specified in the policy.
Additionally, some policies may offer “contingent non-forfeiture benefits upon lapse,” a feature that gives policyholders more options in the light of a significant increase in premiums. This simply means, if you do not buy the no forfeiture benefit option, then a contingent no forfeiture benefit is triggered if the policy premiums increase by a certain percentage.
Moreover, renewability is another factor you must also check prior to acquiring LTC. Normally, the provision for renewal is found on the first page of the policy document which specifies the conditions under which the policy can be cancelled and premiums may increase. Most of the time, all policies of long-term care are sold to individuals are guaranteed renewable. They cannot be cancelled until you pay your premiums on time. In terms of premiums, this may surely increase but if they are increased for an entire group of policyholders only.
Lastly is disclosure. Your medical history is very important because the insurance company uses the information you provide in your application to assess your eligibility for coverage. It must be complete and accurate. Otherwise, the insurer may be within its rights to deny coverage when you declare a claim.