Long-Term Care Insurance: Three Things To Know Before Buying

When it comes to contemplating the purchase of long-term care insurance, there are certain important facts few consumers are familiar with.  Understanding some of these lesser-known nuances can help you obtain better coverage.  Potentially, they can help you save year after year.

The Importance Of Your Health: Before approving your application, every long-term care insurance company will carefully scrutinize your health.  Expect to answer detailed questions regarding health conditions present and past.  Additionally, you'll need to provide a list of all prescribed medications and possibly undergo a cognitive analysis.

As a result of existing health issues, some 37 percent of individuals who apply between ages 65 and 69 are declined according to the latest data shared by the American Association for Long-Term Care Insurance. The decline rate increases to 46 percent for applicants between ages 70 and 74.

Each insurance company sets their own acceptable health standards that include height and weight.  It's vital to understand that being declined by one insurer may result in an auto-decline by other insurers.  As a result, those with some existing health issues, a recent hospitalization or individuals taking prescription medications other than those for high blood pressure and cholesterol, should shop for a carrier that potentially more accepting of their current situation.

Most Utilize Coverage For Home Care: The recent Covid pandemic has heightened awareness of the health risks associated with residing in a skilled nursing facility.  While most consumers associate the term long-term care with nursing home care, it's quite a different matter for those who have long-term care insurance.

Insurers report that the majority of long-term care insurance claims are made by policyholders receiving care in their own home. Indeed, the latest data finds that nearly two-thirds of all long-term care insurance claims pay for care in the individual's home.

Virtually all policies being sold today offer home care benefits.  That's where the similarity ceases and there can be important differences among policy provisions.  Some will require a 90-day period before home care costs are covered.  Others will cover care without such a waiting period.  This can be especially important for single men or women who lack a spouse or partner able to provide care until insurance benefits kick-in.

Insurance Prices Can Vary Significantly:  Unlike many other forms of insurance where one can switch insurance policies to obtain better rates or benefits, this is generally never the case with long-term care insurance.  Switching insurers after a few years will generally cost you more and that assumes you can meet the new insurer's health requirements.

A recent independent comparison of leading insurers found that equal coverage for a health couple both age 55 could cost as little as $3,430-a-year or as much as $6,320  annually.

To find the best long-term care insurance costs, experts recommend working with an agent who is appointed with the major insurance companies.  Appointed is insurance industry jargon that means they can actually sell you policies from the particular insurance carrier.