Long-Term Care Insurance: What You Should Know - Part 1 of 5

1. Product Benefits

While most policyholders don’t want to know every detail of a Long-Term Care Insurance (LTCI) policy’s coverage, they do want accurate information on the benefits they need.

Steve van Gilder, CLTC, a Genworth Financial agent and president of Long Term Care Specialists Inc. in Birmingham, AL., says those need-to-know benefits include:

Provision for Independent caregivers: This benefit allows insureds to hire friends, relatives, etc. as home-caregivers; it works best when the insured anticipates needing help with the activities of daily living versus medical care and wants to receive care at home. “Most people think of this as the ‘anti-nursing home’ benefit,” says van Gilder.

Shared Care: Allows two insureds spouses or partners, for example to be named on the same policy and share a pool of LTC benefits. Whatever benefits remain after the death of the first insured become available to the surviving insured.

Inflation Protection based on the full coverage amount: Some policies base their inflation adjustments on the remaining unused benefit, but it’s more beneficial for the insured if the inflation increase is based on the original pooled amount.

Care Coordination: Expert advice provided by the insurance company to help family members or other caregivers determine which services and care providers to work with.

Lump Sum Withdrawals: Home assistance or home modification provisions give a client greater flexibility in covering large expenses related to the need for care. For example, assume the policy pays a benefit of $4,000 per month and the insured needs to install a chairlift to get up and down the stairs at home. With this provision, the contract provides a pool of funds say, three times the monthly maximum benefit or $12,000 that the insured can use for the construction.