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Long-term care insurance is an option that more and more
people are asking about. Should I get it? How much does it
cost? How much coverage do I need? This week I'll write
about long-term care policy considerations.
Colorado has two long-term care plans, basic and standard,
that all insurers who do business in Colorado must offer.
This allows you to compare benefits and costs easily. You
can purchase one of the standardized versions or a different
policy; either way, you will need to read carefully and
compare thoughtfully.
The basic plan covers nursing home care only and pays up to
$100 of the daily nursing home costs. There is a three-year
or lifetime benefit maximum of $109,500. The standard policy
includes these benefits and, in addition, covers up to $50
each day for home care coverage, both medical and
non-medical services. The lifetime benefit maximum for the
standard policy is $125,000 for any combination of nursing
home and home care.
Both policies start paying when the insured is not able to
perform two or three activities of daily living defined as
bathing, continence, dressing, eating, toileting,
transferring or has severe cognitive impairment. The
coverage also includes a 5 percent inflation factor that
automatically increases each year.
To give you a general idea of premiums, the middle premium
for a basic plan at age 60 is $830 compared to the middle
premium for the standard plan at age 60 is $1,261. These
premiums are paid yearly until the coverage is needed.
Consider the following when you compare policies:
- Steer clear of policies that require prior
hospitalization in order to qualify for nursing home or
home-care stays. It is against the law to require this but a
company might write it into the policy.
- Avoid policies that limit services to registered or
licensed practical nurses. You don't want a policy that
leaves the eligibility decision for long-term care coverage
to insurance-company paid doctors.
- Look for policies that count days in the deductible
period cumulatively over several stays, rather than
consecutively during one stay.
A policy is a legal contract between you and the insurance
company, so read everything carefully. Most policies allow
you to cancel within 10 days of signing up with a full
refund if the policy does not meet your expectations.
For more information, contact your local
Colorado State University Extension office.
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