Selecting the Best Long Term Care Insurance Riders

Selecting the Best Long Term Care Insurance Riders

Long term care insurance offers various services that would surely satisfy and fit the needs of its consumers, but its complex features make it more troublesome for consumers to pinpoint which exact coverage they need. Insurance companies come up with innovative features or riders to create certain brand identity and distinguish themselves from the rest. Competition in the market is tough; companies will do everything to make their products stand out and make them uniquely different. One common strategy these companies do to attract larger consumer segment is through offering various bells and whistles such as discounts, expanded benefits, and riders. Riders are special features added in a basic policy that normally requires an extra cost.

As consumer, you'll find it difficult to distinguish which rider is beneficial for you because not all riders are applicable to your situation. Yes, riders can provide benefits but normally add up to the cost of your premiums, so think twice before buying a specific rider. Long term care policies must be "simple" and "affordable" according to Jesse Slome, executive director for the American Association for Long-Term Care Insurance. He advised consumers to understand the advantages of different riders and their corresponding price, and avoid impulse spending as much as possible. You must have adequate long term care insurance information to select only the important LTCi riders and to manage your premiums and coverage.

Spousal benefit rider

This is one of the most important riders consumers must purchase, according to Slome. This allows each spouse to use the other's pool of benefits. Although this rider can make your premiums up by 15 percent, either spouse can lengthen the coverage to five or six years.

Home Health Care Rider

Most longterm care policies today offer this type of rider. In previous years, it was sold separately, but nowadays it is included in the basic LTCi policies. Most long term care insurance policies are "tax qualified," meaning the company follows the strict compliance to the guidelines of the National Association of Insurance Commissioners (NAIC) and the Health Insurance Portability and Accountability Act (HIPAA). The benefits covered in tax-qualified LTCi also contain certain tax deductions.

Non-forfeiture Rider

All tax-qualified policies must offer non-forfeiture benefit rider to policyholders. Although the state requires this rider, very few people consider buying this as addition to their policies.

The name itself tells what this rider is responsible for: it prevents the benefits from being stripped off by the insurance company even if you stop or cancel the payment of premiums. The two types of non-forfeiture riders are cash-back option and the shortened benefit period. The cash-back option or also known as "refund of premium" assures the refund of the premium to the beneficiary in case of the policy holder's death or stopped payment. The shortened benefit period, otherwise, gives the benefit depending on the time and the amount the policyholder has paid for the policy.

Inflation Protection Rider

This is the most important rider in any LTC policies. This rider automatically increases your benefits to prevent it from becoming exhausted due to increasing costs of care. This is always optional because it can significantly increase the price of your premiums.

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