Insurance - Long-Term Care - Considerations in Evaluating
Long-term care insurance can provide valuable monetary help to those needing long-term care, typically the elderly. Whether to buy such insurance is a decision personal to each individual. However, there are many general considerations that should be taken into account when determining whether the purchase of long-term care insurance is wise.
First, think about the factors that often play into whether long-term care is needed. For example, consider your health status, including whether you have any progressive or chronic health conditions. Also consider your gender. Women tend to need nursing care more often than men. Finally, consider your financial status. If you have few assets and income, long-term care insurance is probably not a wise investment. This is partially because it is more likely that you will not be able to afford increasing premiums, but also because you may not have substantial assets to preserve for family members. If the only income you have is through the Social Security Administration, long-term care insurance is probably not a wise or necessary option for you.
Second, if you have decided to purchase long-term care insurance, comparison shop. Your state's department of insurance can provide a list of companies authorized to sell this type of insurance in your state. Contact several of them for copies of available policies and their costs. Request outlines of coverage, which are summaries of important aspects of the policies. Use these to compare policies.
Third, investigate the companies that offer the policies under consideration. In addition to contacting your state department of insurance for any available information, contact the Better Business Bureau, the local Chamber of Commerce, and the state attorney general's office, each of which may be able to provide additional information on the relevant companies. Some private companies and rating agencies review financial records of insurance companies and assign grades to them, assessing their stability, such as the Best Company, Moody's Investor Service, and Weiss Research. Find out how the companies issuing your prospective policies fared in one or more of these reviews.
Fourth, make sure you understand all aspects of the policies you are considering, including the coverage, coverage triggers, premiums, elimination periods, and exclusions. This is very difficult to do because there are no standardized long-term care policies. As a result, policies tend to be a mishmash of different provisions. For that reason, you should learn as much as you can about long-term care insurance. A separate article fully discusses various clauses often present in insurance policies.
Additionally, many individuals in your community may be able to help with this difficult task. For example, in some states, agencies on aging provide insurance counseling programs. Attorneys with experience in insurance coverage issues, as well as financial advisors, can also help you compare insurance policies. Even the assistance of a trusted friend or family member can be helpful when making such a large commitment. Remember that if you are dealing with an insurance agent, he or she probably earns a hefty commission on a long-term care insurance policy, so it is wise to consult others rather than relying on the agent's advice.
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