Long Term Care Insurance Pros and Cons
Long term care insurance is a product sold in the United States and United Kingdom which provides health care benefits beyond a predetermined period. The long term care insurance mostly covers facets which are not covered under normal health insurance policies and Medicare. This policy pays for the individual's care at a nursing home, an assisted living facility or at his/her own house. Since the policy has numerous benefits and drawbacks attached to it, going though the details becomes essential before deciding to take the policy.
The basic aim of a long term care insurance is to provide an individual with financial protection in case of an disability which might render them incapable of caring for themselves. Mostly, people opt for a long term insurance care policy when they do not want to be a burden for their children, after growing old, and want a certain amount of independence in old age. The insurance policy will cover and pay for all types of health care as specifically mentioned in the policy document. The policy varies in premium payment, depending on the type of coverage chosen by the individual. The more the benefit, longer the policy will provide for care, and consequently higher the cost of insurance.
Pros
The average annual cost of long term care, currently, can be anywhere between US $30,000 to US $85,000. This is a huge amount and is tipped to grow even further, due to inflation. There are chances an individual will have to relinquish his personal assets, life savings or use retirement funds to pay for this. Long term insurance policies provide a financial safety net when it comes to all these expenses incurred on health care in future. A good thing about these policies is that the policy is renewable and that there is no need for any medical examination to get the policy. As long as the premium is being paid regularly, the policy cannot be canceled.
Most long term insurance policies are flexible, indicating that they will pay for any kind of health care expenses like home care, nursing at home or assisted living care. The insured individual as well as his family members have a choice and an option of changing their mind as and when health care problems occur. Some of these policies are tax deductible, thus, bringing down the money spent on premiums.
Cons
Long term care insurance policies are generally expensive when it comes to paying premiums. Although rates vary according to the coverage of the policy, it is still a considerable amount. It is thus, a better idea for an individual to go through the entire policy period and asses his financial position to determine whether he will be able to pay the premium over the set period or not. Also, like all other insurance policies, there is a certain amount of risk involved here as well, because there may never be a need to use it and all the premium money is wasted.
Due to the numerous types of long term care insurance policies in the market, an individual may find it tough to decide on the exact policy to suit his needs. It is advisable to spend some time and weigh all options properly, before deciding on the exact policy to be purchased. Certain types of policies also demand extra money from people who have crossed a certain age limit or are currently suffering from any medical condition. Some of the long term care insurance policies have a maximum benefit period and a cap on the maximum amount they can spend, beyond which the policy ceases the coverage.
Coverage and Exclusions
Apart from knowing about the long term care insurance, it is also important to know about the coverage and exemptions of these policies. Individuals under this policy are provided coverage from the time they are unable to perform two activities of daily living like bathing and dressing. These policies also provide coverage for the care provided by a licensed nursing home, an assisted living facility or any other home health agency certified under Medicare.
Exclusions for this policy are common as found in other health insurance policies. There are certain kinds of mental and nervous disorders which are not covered under the long term care insurance policy. Also, people suffering from drug abuse or alcoholism problems are not covered under this policy, nor are people suffering from an self-inflicted injury.
Going through the pros and cons in the article should be useful while deciding to go with the policy or not. An individual needs to assess his financial position correctly, and consequently determine whether or not he will be able to pay the premiums or not. A long term insurance care policy is a good cushion for any old age medical expenses an individual might incur.
The basic aim of a long term care insurance is to provide an individual with financial protection in case of an disability which might render them incapable of caring for themselves. Mostly, people opt for a long term insurance care policy when they do not want to be a burden for their children, after growing old, and want a certain amount of independence in old age. The insurance policy will cover and pay for all types of health care as specifically mentioned in the policy document. The policy varies in premium payment, depending on the type of coverage chosen by the individual. The more the benefit, longer the policy will provide for care, and consequently higher the cost of insurance.
Pros
The average annual cost of long term care, currently, can be anywhere between US $30,000 to US $85,000. This is a huge amount and is tipped to grow even further, due to inflation. There are chances an individual will have to relinquish his personal assets, life savings or use retirement funds to pay for this. Long term insurance policies provide a financial safety net when it comes to all these expenses incurred on health care in future. A good thing about these policies is that the policy is renewable and that there is no need for any medical examination to get the policy. As long as the premium is being paid regularly, the policy cannot be canceled.
Most long term insurance policies are flexible, indicating that they will pay for any kind of health care expenses like home care, nursing at home or assisted living care. The insured individual as well as his family members have a choice and an option of changing their mind as and when health care problems occur. Some of these policies are tax deductible, thus, bringing down the money spent on premiums.
Cons
Long term care insurance policies are generally expensive when it comes to paying premiums. Although rates vary according to the coverage of the policy, it is still a considerable amount. It is thus, a better idea for an individual to go through the entire policy period and asses his financial position to determine whether he will be able to pay the premium over the set period or not. Also, like all other insurance policies, there is a certain amount of risk involved here as well, because there may never be a need to use it and all the premium money is wasted.
Due to the numerous types of long term care insurance policies in the market, an individual may find it tough to decide on the exact policy to suit his needs. It is advisable to spend some time and weigh all options properly, before deciding on the exact policy to be purchased. Certain types of policies also demand extra money from people who have crossed a certain age limit or are currently suffering from any medical condition. Some of the long term care insurance policies have a maximum benefit period and a cap on the maximum amount they can spend, beyond which the policy ceases the coverage.
Coverage and Exclusions
Apart from knowing about the long term care insurance, it is also important to know about the coverage and exemptions of these policies. Individuals under this policy are provided coverage from the time they are unable to perform two activities of daily living like bathing and dressing. These policies also provide coverage for the care provided by a licensed nursing home, an assisted living facility or any other home health agency certified under Medicare.
Exclusions for this policy are common as found in other health insurance policies. There are certain kinds of mental and nervous disorders which are not covered under the long term care insurance policy. Also, people suffering from drug abuse or alcoholism problems are not covered under this policy, nor are people suffering from an self-inflicted injury.
Going through the pros and cons in the article should be useful while deciding to go with the policy or not. An individual needs to assess his financial position correctly, and consequently determine whether or not he will be able to pay the premiums or not. A long term insurance care policy is a good cushion for any old age medical expenses an individual might incur.
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