Your chances of living longer have greatly increased. With
that blessing comes new challenges such as how you will
live and if you will be able to stay in your own home.
Long term care insurance, which aids you in caring for
yourself during your old age, could be the most important
decision you will make for the rest of your life.
Because of the complications in buying long term care
insurance you need to be wary of the 7 most deadly traps
that could rob you of your independence.
Trap #1: Not checking out the background of your
insurance agent
This is not car insurance or a homeowner policy that can
be switched from company to company. You will be making a
long investment in your future and you don't want to waste
money and time.
Just because you have an agent you like who handles your
car insurance doesn't mean he will be able to guide you
through this complicated maze of potential policies.
Getting the right agent who knows what he is doing and is
honest is absolutely vital.
Only deal with those agents who have clean records. The
best way to research them is with your state insurance
regulator. You can also check with the American
Association for Long-Term Care Insurance (aaltci.org)
Trap #2: Not researching the insurance company thoroughly
You want to make certain the insurance company has a low
complaint ratio, and does not have a history of increasing
the premiums on "classes" or "groups" of policyholders
instead of individuals.
Verify the financial strength of the long term insurer.
That's important since you will be keeping this policy for
many years. You don't want to be faced with fickle
finances later as your insurance company scrambles to raise
premiums in order to stay in business.
Trap #3: Not Buying a Tax Qualified Policy
This is very important because you do not want your
benefits considered to be income.
You also want to make sure you can deduct some or all of
your benefits from your taxes. This is an important detail
that can save you a lot of grief later.
Trap #4: Not knowing exactly what your coverage includes
Will your policy care for all of your needs, or just some
of them? Do you know which ones, or are they hidden in the
fine print?
For example, is it a nursing home only policy or will it
cover your in-home care expenses such as daily living aids?
Will you be able to stay in your own home because your
policy pays people to help you with your meals, bathing, or
other needs?
Trap #5: Not getting a policy that is inflation-proof
This may be your most important consideration since
inflation grows expenses. Inflation is something we can
count on, so we need to be adequately prepared for it,
especially as we look down a road that could stretch for 20
years or more.
It is important to know if your policy gives you the right
to add coverage at a later date, or if your coverage
increases automatically.
Trap #6: Not being able to back out of a policy
Will you be able to conceal your policy within 30 days of
purchase?
You should be able to back out it you change your mind or
discover the policy is not in your best interest. Not
only should your policy give you a way out if you are
displeased, but you also want to receive a refund.
Trap #7: Not being able to keep a policy indefinitely
Can you keep your policy as long as you pay the premiums,
or will the company be able to drop you?
Does your policy also include a non-forfeiture benefit
which will continue to pay for your care even if you stop
paying the premiums? That feature in not totally necessary
and can increase your premiums costs, but it is still
important to keep in mind.
----------------------------------------------------
Alice Stevens is actively involved in issues affecting the
aged and their caregivers. She writes regularly for the
blog Aging Parents Authority.
http://www.agingparentsauthority.com
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