How Do I Compare Long-Term Care Insurance for Long-Term Care Health?

Long-term care is a subject most of us don't like to think about. The prospect of needing nursing home care is unwelcome. Having family take care of us is equally depressing. The costs can be overwhelming. One way to ease some of the worry about long-term care is to purchase long-term care insurance. Comparing policies can also seem overwhelming, but there are a few key areas to look at and ensure you're getting a policy that's a good value with the coverage you need from a reputable company.

Getting Started

• The first step in comparing long-term care insurance policies is to get policy quotes and breakdowns from companies approved to sell insurance in your state. You can find companies through your state department of insurance. Contact the companies, and request a quote. You may need to meet with an agent; be up front with them that you're looking for a quote. Even if you apply for a policy, you can continue to compare, as policies are required to have a "free-look" period, which is a period of time to review the policy and return it for a full refund.

Policy Benefits

• All long-term care policies have a daily benefit and a benefit period. The daily benefit is the maximum amount a policy will pay per day for covered services. The benefit period is the minimum amount of time the policy will last. For example, a policy may have a $150 daily benefit and a benefit period of 730 days. If you multiple these numbers, you have your total benefit, which in the example is $109,500. This means you have $109,500 to use toward long-term care. You can use up to $150 per day, and it will last at least 730 days. If you use less than $150 per day, the policy may last longer, but it will end when you've spent $109,500. Policies also have an elimination period, which can be anywhere from zero days to six months. This is similar to a deductible, and is the amount of time you're responsible for covered costs before the policy starts to pay benefits.

Covered Services

• Covered services vary from plan to plan. Nursing home care is covered by most plans; the prospect of nursing home care is why most people buy long-term care insurance. Many plans also cover assisted living and facilities that offer specialized care, such as for people with Alzheimer's disease. You may also have the option of including home health care, which is coverage for bringing a nursing assistant into your home to help with personal care, including eating, bathing, dressing and toileting. The policy may also cover assistance with meals, shopping and light housekeeping. Adult day care may be covered as well. There may be other benefits, such as coverage for home modifications or ambulance trips. It's important to look carefully at what each policy covers so you can make an accurate comparison.

Exclusions

• Policies generally will not cover care provided by a family member. They also won't cover care by an unlicensed person or at an unlicensed facility. According to America's Health Insurance Plans, or AHIP, policies also don't cover care that is needed because of alcohol abuse, drug abuse or self-injury.

Comparing Companies

• The companies you receive quotes from should include some basic information about the company: the year it was founded, how many policyholders it has, and its independent rating. You can also find how companies are rated through A.M. Best, an independent company that rates insurance companies according to their financial strength (see Resources).