Thursday, March 17, 2011

Long-Term Care Insurance Analysis

Aging is an inevitable part of life, and the older we get the more likely we will require some form of professional medical assistance. The cost of health care in the United States is increasing every year, and the cost of nursing home and assisted living care keeps steady pace. By understanding the basic components of a long-term care insurance policy, and eventually purchasing coverage, you will have taken an appropriate step to protecting your family and your finances.


The purpose of long-term care insurance is to provide a monetary benefit if you should require nursing home residency, assisted living facility care, or other similar professional assistance. Without this type of coverage, the cost of such care would be well beyond the reach of most people. The exorbitant cost of elder care averages more than $70,000 per year, and in some regions of the country more than $100,000 annually. Since few Americans possess financial resources to cover such an expense, long-term care insurance is essential for preventing economic devastation if care becomes necessary.

Elimination Period

The period of time after you become eligible for long-term care insurance benefits, but before any money is distributed by the insurance company, is called the elimination period. Longer elimination periods result in less expensive policies because a smaller financial liability lies with the insurance carrier. Common elimination periods range from 30 to 90 days but may as long as one year.

Benefit Period

After the elimination period has passed, the carrier sends monthly checks to the insured person. The money will continue until you are no longer in need of professional long-term care or until you exhaust the benefits of your coverage. If you remain in need of long-term care services or treatment after the expiration of your benefit period, you must make other arrangements. The majority of long-term insurance carriers offer benefit periods ranging from two years to lifetime coverage, and the average stay in a nursing home is two to three years.

Benefit Amount

The amount of money you receive every month during the benefit period is called the benefit amount. You must choose this dollar figure at the time you buy the policy. Your decision regarding the amount of your policy’s benefit should be largely based on the average cost of care in your geographic area of the country. Additionally, you must carefully consider your own financial capabilities with respect to both the monthly premium payment and the possibility of being required to pay for your own care during the elimination period.

This article is a Twisted Nonsense Exclusive! (03/17/2011)

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