Our chance for needing long term care (LTC) increases the longer we live. Directly paying for LTC can easily deplete an average person’s estate leaving a beneficiary with no legacy. You can purchase LTC insurance to protect your legacy. But you must understand if the 7 key parameters of your policy will do the trick for you. These are explained below.
Long term care consists of helping a person with performing his daily activities (eating, bathing, toiletry, etc…) when he no longer can do them alone. Helping an elderly to doing these can occur at home, at a day center or at a nursing home at approximate yearly cost of $15,000, $30,000, and $80,000 respectively.
Without sufficient income and an estate of a few hundred thousand, such costs – especially at a nursing home – can wipe you out in a few years. You can use long term care (LTC) insurance to help preserve your estate as a legacy. But you better know what parameters determine how effective that insurance will be in your situation.
The seven parameters that characterize most LTC insurance policies are:
1. Services are covered
2. Excluded coverage
3. Triggering event for coverage
4. Elimination period
5. Maximum daily benefit
6. Length of coverage of benefits
7. Cost of premiums