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There are many kinds of Long Term Care Insurance Policies. The common ones are “Indemnity” or “Expense Incurred” policies. You choose the benefit amount when you buy an expense incurred policy. An “indemnity” or “per diem” policy pays up to a fixed benefit amount regardless of what you spend. You are reimbursed for the actual expenses for services received up to a fixed dollar amount per day, week, or month with an “indemnity” or “per diem” policy.

Another popular LTCI category is the “Integrated Policies” or policies with “Pooled Benefits” where a total dollar amount may be used for different kinds of long term care services. With these kinds of policies there is usually a daily, weekly, or monthly dollar limit for long term care expenses covered. You buy let’s say for example a policy with a maximum benefit amount of $300,000 of pooled benefits. You maximum daily benefit with this policy would be $300 that would last for 1,000 days if you spend the maximum daily amount on care. You can receive benefits for more than 1,000 days if your care costs less than the maximum daily amount of $300.

There are three broad categories of LTCI policies based on where benefits are paid - Home Care Only, Nursing Home and Residential Care Facility Only and Comprehensive. Care received in your own home or a community setting is possible only with Home Care Only policies. Home health, adult day health care, hospice, respite care, personal care and homemaker services costs are coved by these kinds of policies.

Costs rising out of care in a nursing home or any place that provides assisted living care as long as this place is licensed as a Residential Care Facility for the Elderly (RCFE) is covered by Nursing Home and Residential Care Facility Only policies. This policy pays for more than just room and board in these facilities. The costs of all long term care services you receive in either of these facilities is paid by this policy up to the policy’s maximum daily benefit amount.

Some of the RCFE include small neighborhood homes also called board and care facilities, retirement homes and specialized community facilities for patients with cognitive impairment (dementia) from Alzheimer. In this kind of policy, the assisted living benefits must equal to at least 70% of the nursing home care benefit.

The Comprehensive Long Term Care Insurance Policies cover costs rising out of care in a nursing home, assisted living facility, home care and community care (adult day care). LTC Comprehensive policies sold by different companies require different criteria to be met before benefits can be paid. When you are unable to perform two activities of daily living (such as bathing, using the bathroom, dressing eating etc.) or you have a cognitive condition that requires supervision, Comprehensive Long Term Care Insurance Policy will pay you the benefits. Whether care is provided in a nursing home, at your own home or in an assisted living facility the criteria required for the benefits remains as described above.

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Long Term Care Insurance Policy Premiums are determined by the type of policy chosen, daily benefit amount to be paid, your age, number of years the policy will pay benefits, choice of inflation protection and the number of days after you qualify for the benefits before the company will start to pay benefits. If you have a pre-existing condition some companies will insure you for a higher premium. The combination of these factors decides your LTCI premium.

Different LTCI companies calculate differently the cost of benefits you choose. This reason can result in significant differences between premiums for similar benefits. For example a company may calculate the premium based on every $10 of the daily benefit you choose. The premium would be $950 per year for a daily benefit of $100, if the company charged $95 for each $10 of daily benefit. With another company the annual premium would rise to $1,500 for a similar package of benefits with a cost of $150.

The method and amount of inflation protection chosen will also influence your LTCI premium. For those in their 40s and 50s not expecting to need care for several years this nearly doubles their cost. Your probability of developing health conditions which make you ineligible to apply for new benefits increases with age but your ability to change LTCI policy diminishes as you age.

Your LTCI premiums can increase over the years. When you buy a LTCI policy your agent provides you with a personal worksheet which explains in detail among other things, the rate increases the company has had since 1990. In which states and by how much the rates increased is also stated in this sheet. The rate increases for every company that sells LTCI is listed on the California Department of Insurance website. In 2000 California passed legislation, making it difficult for LTC insurance companies to increase future premiums.

When it became mandatory in 2006 for all companies filing for premium increases over a certain amount to offer a choice, policy holders got to choose between stop paying their premium and keep the benefits equal to the total amount of premiums already paid. The sum of premiums that has already been paid will finance only a small amount of care. If you were unable to pay because of a premium increase, you will not lose all your benefits.

Lower premiums can be negotiated with your company by reducing some of your policy benefits. If you need to lower your premium or you have received a premium increase notice contact your local Health Insurance Counseling and Advocacy Program (HICAP) office.

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Buying long term care insurance policy involves research and then choosing one with the maximum coverage. Consider your current financial situation, your savings and assets, and how and where you want to receive your long term care. Buy a long term care insurance policy from a financially sound company and with a good rating to ensure that the company from which you are buying your policy will be around when you want to receive your benefits. Look for long term care insurance reviews to understand the claims process and find out how many filed claims have been paid by the company.

Your state of residence and the cost of long term care services in your area influence your long term care insurance quote. Seek a Long Term Care Insurance policy that factors in the inflation rate. Find a policy that provides the maximum daily coverage and has non-cancel and guaranteed renewable features. You want to make sure that your policy is there for you when you need it the most. A nursing home care for a day that costs you $140 today will cost approximately $260 in 15 years at 5% inflation rate. You may be left with too little money too late if inflation is overlooked when buying your Long Term Care Insurance policy.

Consider a Long Term Care Insurance policy with coverage when unemployed, works with your Social Security and comes with non-cancel and guaranteed renewable features. Some Long Term Care Insurance policies have an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout - either reimbursement or indemnity. Long Term Care Insurance policies allows you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Look into Long Term Care Insurance policies which allow you to receive benefits if you experience an income loss from a partial or a total disability.

Consider a Long Term Care Insurance policy with coverage when unemployed, works with your Social Security and comes with non-cancel and guaranteed renewable features. Some Long Term Care Insurance policies have an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout - either reimbursement or indemnity. Long Term Care Insurance policies allows you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Look into Long Term Care Insurance policies which allow you to receive benefits if you experience an income loss from a partial or a total disability.

A Long Term Care Insurance policy with the maximum coverage gives you the financial independence and dignity when you have the option of being able to go where you want to go instead of going where you are taken. Long Term Care Insurance policies with fixed premiums and stay in force as long as you pay the premiums not only protect your assets but should you overcome the need of long term care, you still have your savings to enjoy when you recover.

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