When should someone consider buying Long Term Care Insurance and what benefits should they look for?

If possible look for a policy that will cover your long term care expenses for at least five years. When you do begin to collect benefits the policy will pay you for the next five years. At the time you enter the nursing home, if you feel you may need more than five years of benefits, then you can do Medicaid planning at that time. However to protect all your assets Medicaid planning needs to be done five years before you apply for Medicaid. This five year waiting period will be covered by your five year long term care policy. Make sure your policy covers not only Nursing Home Care but also Assisted Living Facilities and In Home Care. Benefits are based on a daily rate for example a long term care policy may pay the following benefits:
Nursing Home Care $150/day
Assisted Living Facility $ 75/day
In Home Care $ 50/day
If affordable get an inflation rider. If you buy a policy today but you don’t use until 15 years from now, the cost of care will be at least double or triple what it is today. An inflation rider causes the benefits of the policy to increase each year with inflation so when you actually use the policy it will still pay for the same level of care as when you originally purchased the policy. Purchase a policy which gives you full daily coverage such as $150/day in Nursing Home Care and life time benefits. If this is not affordable or within your budget remember you already have a monthly income that could pay part of your care. For example, if you are single and your monthly income is $2,500. If a policy which pays $4,500 per month or $150 per day is not affordable only purchase a policy which pays $2,000 per month or $67 per day. This $2,000 along with your monthly income of $2,500 would be enough to pay a nursing home cost of $4,500 per month. A policy which pays $67 per day will be significantly cheaper than a policy which pays $150 per day. If you can afford a life time benefit policy this is the one to buy but if cost is a factor purchase a policy which covers only four or five years of care. This can save you some premiums.

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