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Baby Boomers reaching 50 are quickly beginning to consider one of the
newest forms of insurance — long term care insurance. They’re seeing
their parents and grandparents living well into their 80s, 90s and even
to 100.
They realize that there may eventually be a need for their own long
term care. They may wish to protect their resources to leave an
inheritance for their children. Or, if they have no offspring, wish to
be assured there will be some type of protection to cover their
potential needs.
Nearly two in five people 65 or older spend some time in a nursing
home. Half of these stays are less than 90 days, which often is covered
by Medicare. Three-fourths of nursing home stays are less than one year.
But one out of every four people will spend a year or more in a nursing
home; one in 11 will spend five years or more. Men average two years in
a nursing home, women four years.
If, after reviewing your financial situation, you decide to spend money
on premiums now on the chance it will save money in the future, shop
carefully. Long term care insurance rates will vary according to the
types of coverage selected and the age and health of the insured.
To help you compare long-term care insurance, Colorado State University
Extension has a fact sheet, No. 9.152, Long-Term Care
Insurance, available on-line at
www.ext.colostate.edu/pubs/consumer/pubcons.html#finance. This
resources provides a table to help you compare long term care policies.
Compare at least three companies.
Check to see how long the insurance company has been in business and the
extent of their assets. The company should have been in existence for
several years, have billions in assets, and possess at least an A or
higher rating on the Standard & Poor or other rating agency scales.
Premiums should be competitive with other policies, not significantly
below market rates. Is there a guaranteed renewable clause? Is there
inflation protection? Is home health care or assisted living covered?
What is the deductible? What is the length of coverage? Is there a bed
reservation benefit? High daily benefit rates mean a higher premium.
Consider the amount you can cover from your own Social Security or
pension benefit or investments. Learn about the company’s claim paying
record. Ask how the company treats current policyholders when they
update. Are enhancements written on a guaranteed basis, for additional
cost or is medical requalification required?
Examine policies carefully to assure that cognitive impairments, such
as Alzheimer’s disease, are covered without any signs of physical
impairment. Know what you must pay yourself, such as private phone, hair
care, transportation to medical appointments, or other expenses. The
policy should provide for third-party notification so the policy can’t
lapse if you forget to pay a premium because of dementia.
A good policy does not require you to be hospitalized before benefits
are payable. All levels of nursing care should be covered. Purchasing
long term care insurance is a big decision. Use Colorado State
Extension’s fact sheet on long term care insurance to assist
you in making that decision. Contact your local county Colorado State
Extension office or visit the web page mentioned above to
access this free decision making tool.
For more information, contact your local
Colorado State University Extension office.
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Uploaded Tuesday, November 27, 2007
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