Long term care insurance is intended to help defray the costs of custodial care or care in which the patient can no longer perform many of the tasks of daily living such as eating, bathing and dressing. The costs of this kind of care can be very expensive and wipe out savings very quickly. It should be noted that you don’t need to be a senior citizen to require long term care since it is estimated that some 40% of custodial care patients are below 65. Long term care policies help pay for expenses such as home care, a nursing home stay and hospice care.

There are three main types of long term care policies:

1. Reimbursement Insurance. With this type of long term care policy, you are reimbursed for your actual expenses. For example, if you spend $200 a day in hospice care, you are reimbursed $200 even if the daily benefit amount of your policy is $300. The difference goes back into the benefit pool. Conversely, if your long term care expenses are higher, the policy will only pay up to the daily benefit amount limits and you will have to shoulder the remainder out-of-pocket.

2. Indemnity Insurance. This type of policy pays you back your full benefit amounts even if your long term care expenses are lower. For example, if your benefit amount is $400, you will be paid $400 even if the actual costs of your long term care are only $300. However, for this type of policy, you will have to pay higher premiums.

3. Partnership Insurance. This category of long term insurance has an Asset Protection feature that allows individuals with a policy to qualify for Medicaid by disregarding protected assets; otherwise, they would have to be legally destitute in order to be eligible for Medicaid. Policies bought by younger individuals are also required to have inflation protection that increases the amount of the daily benefit by a certain percentage every year to cover the rising costs of long term care. You also have the option of an inflation protection feature that compounds the benefit annually and will effectively double the amount of daily benefits you will receive after a certain period. However, this option will also increase, and may even double, your premiums.

The benefits of buying long term care insurance include:

1. It frees the patient from having to rely on family to cover out-of-pocket custodial care expenses, an important consideration in these hard economic times when families may not have the resources to pay for basic health care, much less long-term care.

2. The premiums you pay on the policy may be tax exempt. If you bought the policy before 1997 and it meets state requirements it automatically qualifies. If it was issued after, the plan may be eligible if it satisfies requirements such as providing coverage for qualified long term care services.

3. An employer paying for the long term care insurance premiums of an employee may enjoy the tax benefits if they are not already included as part of an employee’s taxable income.

4. Long term care insurance supplements Medicaid and Medicare in helping meet long term care expenses. Even if you qualify for both programs, they will likely not be able to fully cover all of the expenses of long term care such as a helper or a stay in an assisted living facility.

5. It allows children to help pay for the long term care of their parents. Purchasing this type of policy can supplement the savings of parents in order to make the costs of long term care more affordable.

To save money on your long term care insurance policy, make sure you purchase only the coverage you need. You can do this by estimating the costs of medical care in your area and then determine how much you can contribute from your savings. Don’t forget to take into account the effects of inflation on medical costs.

Knowing more about http://www.ltcfp.com is important to seniors.Visit http://www.ltcfp.com/ltcfp/consumer.aspx.

Knowing more about http://www.ltcfp.com is important to seniors.Visit http://www.ltcfp.com/ltcfp/consumer.aspx.

Author Bio: Knowing more about http://www.ltcfp.com is important to seniors.Visit http://www.ltcfp.com/ltcfp/consumer.aspx.

Category: Finances
Keywords: long term care insurance, personal finance, nursing home, elderly, seniors, aging, retirement,