The reason to buy long term care insurance is to protect your assets in case you need to pay for assisted living, home care or a nursing home stay. Long-term care insurance helps you pay for these services, which can be quite expensive. A policy also ensures that you can make your own choices about what long-term care services you receive and where you receive them in advance.
Like other types of insurance policies, the cost of insurance coverage depends on the specifics of that coverage.
There are a few types of policies available today.
Indemnity plans pay up to a fixed benefit amount regardless of what you spend.
Expense-incurred policies reimburse you for actual expenses incurred up to your fixed benefit amount, as defined by the daily benefit you purchased with the policy.
With a cash-based policy, as long as the policy gets triggered by the activities of daily living, you will not be required to incur expenses to receive the benefits of your claim.
The purchase of long term care insurance should not be a stand-alone decision and must be incorporated with all other planning. When considering the purchase of an LTC policy, you may wish to purchase optional benefits. One such option might be to buy a policy that is guaranteed renewable.
You should also consider investing in an inflation rider to protect the purchasing power of whatever daily benefit you purchase. Finally, if you think there is any possibility that you may not use your benefits, you may want to consider a "return of premium" rider.
