How to Rate Long-Term Care Insurance Companies

We are living longer, obesity is growing at an alarming pace, more people are living alone, more women in the workforce means fewer caregivers, and families are living farther apart. Medical science is prolonging our lives, making it likely that the majority of elderly Americans will need long-term care at some point while the government has neither the desire nor resources to work toward a solution. If you are one of the forward-thinking individuals who is concerned about losing their independence and assets by a health catastrophe in their advancing years, long-term care insurance is definitely worth looking into.

Things You'll Need

• Computer
• Internet
• Insurance specialist

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Instructions

• 1

  How Stable is Your Insurer?

  As you may not be filing your first long-term claim for many years after you buy your policy, it is important to make sure the long-term care company is strong and will still be around when you need it. To find companies with strong histories, search out rating companies such as A.M. Best, Standard and Poor's, Moody's, or Duff and Phelps, which have a grading system for all insurance companies. A complete analysis of each company's balance sheet and operating performance is considered as well as comparisons with competing companies and their business philosophies and management. The ratings range from AAA (extremely strong and the highest rating assigned by Standard & Poor's) to R (the company is under regulatory supervision and is in poor financial condition). (See References 1)

• 2

  Where Can You Receive Care?

  Seek a policy that authorizes "Integrated Home Care at 100%" (see References 2). The insured is authorized to receive care in a licensed facility and an unlicensed one such as the home. It is important to have the flexibility to determine where to receive the necessary care. For example, buying a "Facility Only Policy," limits you to care in a licensed facility and not in your home.

• 3

  What Kind of Care Will You Receive and What Does It Include?

  Determine the level of professionalism your caretaker will have. Will they be a home health care aide or a licensed nurse? What medical conditions will be covered by the policy? Does it include particular chronic illnesses such as Alzheimer's or other conditions that are of concern to you? As some policies exclude certain conditions, it is imperative that you read the policy carefully.

• 4

  What is the Maximum Benefit Available to You?

  "According to the CDC, National Nursing Homes Survey, the average length of stay for long-term care nursing home residents is 2.43 years. (See References 3)" Buy the highest amount you can afford and find out how the price is calculated. Keeping in mind the average length of stay in a nursing facility, it is always smart to insure for a longer period so the family is not troubled by an illness that takes longer to run its course.

• 5

  When are you Eligible and How Soon Does it Pay?

  Eligibility for benefits begins when at least two of the following Activities of Daily Living (ADL's) cannot be performed by the insured:

  • cooking
  • eating
  • bathing
  • dressing
  • using the toilet
  • maintaining continence
  • moving from place to place within the living environment (See References 2)

  Determine how many days you must wait before you receive your first payment. Decide if you want the inflation adjustment option on your policy. If you elect yes, you will receive a 5% increase in the value of your policy every year.

• 6

  Feeling Overwhelmed?

  If you find the idea of going it alone intimidating, you're not alone. Long-term care insurance is not only a relatively new insurance, but also one in which you are trying to guess what may or may not happen in the future. If you have a financial representative that you work with, you may be comfortable letting him do the leg work for you, or, at least, recommending an insurance specialist.

  If you don't have someone you can trust, names of insurance specialists are available on the American Association for Long-Term Care Insurance website (http://www.aaltci.org).