Merritt Personal Lines Manual: Comparison Shopping

For many older citizens in need of LTC insurance, how comprehensive or how costly a policy is may not be as important as which benefits and provisions are contained in the contract.

When purchasing LTC insurance, it's vital to pay close attention to the type of policy benefits provided, the amount of coverage available for each level of care, the basic policy provisions and the policy exclusions and limitations.

The four basic types of benefits provided by individual policies include skilled nursing care, intermediate care, custodial care and home health care. Home health care may appear as an optional policy benefit. All benefits are provided after you have satisfied the policy's elimination period. After the EP is satisfied, benefits will be paid for the maximum benefit period or until you have received the maximum lifetime benefit of the policy.

Two common forms of optional policy benefits include inflation protection and adult day care. As we mentioned earlier, inflation protection typically adds 5 percent each year to the amount of the daily benefit. Adult day care is designed to provide needed custodial and social activities for functionally impaired adults away from their home environment.

Payment Options

The usual method of paying for LTC insurance is a lifetime, annual or monthly premium. But some insurers offer a 10-year or 20-year paid-up option. There are also single-pay policies available to retirees who want to roll over a lump-sum retirement amount into an LTC insurance policy.