Choosing Long Term Care Insurance Policies and Company

Choosing Long Term Care Insurance Policies and Company

One reason why a lot of consumers are skeptical of purchasing long term care ins is due to the complexity of these policies offered by various carriers and companies. They find it difficult to assess which particular features or riders are crucial to their policy to achieve both affordability and efficiency. Moreover, finding the perfect insurance company is something to have an axe to grind.

The first question that bothers most consumers is the right type of policy either individual or group plan. Most companies sell individual and comprehensive LTCi policies in the market today. These policies insure wide array of long term care services, including skilled care and personal care, which are paid through premiums. The number of features and riders added in the policy affect the premiums.

If there are individual policies, there are also group plans available from private employers. One advantage of group policies is that individuals need not undergo medical underwriting, because there is no health qualification required to become eligible for the group coverage. Employees may qualify for coverage despite of their health condition. One disadvantage, however, is it covers limited coverage compared to individual plans. Policyholders are allows to use only the following medical and personal services defined in the group plan, regardless of the state where they reside. Thus, anyone who wants to make most of his or her policy must consider individual plans than the group plan.

The bulk of LTCi policies can be custom-fit to save on premiums. One can purchase rider/s or extra benefits for your policy, but they always raise your premiums a bit. Some of the most important riders are 1.) Inflation protection increases your daily benefits at certain percentage (by 4% or 5% simple or compound) but the premiums remain fixed 2.) Return of Premium protects the policyholder's money in case they haven't used in for a period of time 3.) Waiver of Premium for the Spouse allows the spouse the other's benefits. There are other riders offered but may vary from one insurer to another.

Tax-qualified policies are a lot better than non-tax qualified plans. The former refers to the policies that follow the strict guidelines of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, which set forth the rules of eligibility and criteria. Moreover, tax-qualified policies have tax advantages as defined by Internal Revenue Services (IRS).

When choosing the right carrier or company, there are lots of things to consider just like finding the best LTC policies. The major characteristic crucial to the company is its financial strength or stability. Good and reputable companies must have outstanding claims experience to ensure peace of mind among policyholders. Next, the company must have strong commitment to improving its products and services. Established companies have vast resources to introduce and improve their market unlike those small and inexperienced companies. Avoid companies who cold calls about their products with a promise of better coverage and below the market rates, without first verifying the company's status and conducting long term care research. Third, you may research the potential company through various rating agencies such as Standard & Poor's and Moody's.

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