Health insurance can cover quite a bit, but it usually won't cover things like a live-in caregiver or the costs of an assisted living facility as you age. And those services? They can cost thousands of dollars each month.
Fortunately,can help. With this type of insurance policy, you can make sure your care needs are covered — without delving into your nest egg or draining your savings dry. If you're thinking of investing in for you or a loved one then it helps to know how to choose the right insurer.
How to pick a long-term care insurance company
Here are five steps to take when picking a long-term care insurance company.
Understand why you need long-term care insurance
Before you can invest in a policy, you first need to know what your needs are.
Do you need coverage just for you or for a spouse as well? How much does your existing health insurance plan (or Medicare) cover, and what gaps need to be filled? Finally, how much coverage are you seeking — and how much can you afford? You'll want all this info on hand while you shop around for insurers.
Check with your employer first
If you're employed and eligible for benefits, check with your benefits coordinator, as your company may have long-term care insurance options already available to you.
In some cases, you may be able to add a long-term care rider to your existing insurance policy, too. Either way, it could save you money by going through your employer's plan rather than seeking one out on your own.
As Krystie Dascoli, voluntary benefits practice leader at the Marsh McLennan Agency, explains, "If an employer offers one of these programs to their employees, they will be able to provide the premiums at a group discounted rate."
Shop around for providers
If you're on your own for insurance, then be sure and compare at least a few long-term care insurance companies before settling on one. This can help you get the best premium.
"Not only do rates vary by carrier, but some carriers provide better underwriting offers, such as higher guaranteed-issue limits for the insured and their spouse," Dascoli says.
Shopping around is particularly important if you have an existing medical condition, as these can make premiums even more likely to diverge between carriers.
"Companies have different risk tolerances for some medical conditions, so some companies might accept you through underwriting while others might postpone or only offer an increased premium," says Tom West, senior partner at Lifecare Affordability Plan.
Verify their ratings
Once you have a few long-term care insurance providers on your radar, take time to learn more about each. Specifically, look into their financial ratings, as this indicates how stable the company is — and how likely they are to stay in business (and cover your claims should you need them to.) You can check financial ratings through A.M. Best, Fitch Ratings, Standard & Poors, or Moody's Investor Service.
"They must be an A-rated carrier," Dascoli says.
You should also check an insurer's customer reviews and ratings, too, as they can give you an idea of what kind of service you can expect as a policyholder.
Know the nuances
Finally, make sure you read the fine print of any policy you consider — and always ask questions:
"What type of care is considered long-term care? For example, is home care or adult daycare covered?" Dascoli asks. "How does an insured qualify for the benefit? What documentation is required to file a claim? How is a claim filed? How is the payment made? Is it reimbursement or a lump sum?"
Knowing these answers can help you zero in on the policy that not only best fits your needs, but that you can maximize its coverage when you need it most.
"Always assess the ease of their claims process, as a smooth experience during times of need is crucial," says Todd Wolfe, senior insurance associate at Telemus, a financial management company. "Consider how responsive their customer service is, too, as timely support can make a significant difference in your overall experience."
Consider professional assistance
If you need help finding the right long-term care insurance company or choosingor coverage, you can always consult an insurance agent for help. As Wolfe explains, "Consulting an expert — particularly someone holding a Certification in Long Term Care designation — is highly recommended."
Just be sure you choose an independent agent — not one who works directly for an insurer (those can only offer plans from their employers, rather than giving you a range of companies to choose from.)
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