What Your Long Term Care Insurance Should HaveAll long term care insurance policies are not equal, and there are many complicated aspects and fine print that can easily confuse people. Insurance companies want to sell you top dollar insurance, but you should know what you’re getting and what you are not getting. However, there are 7 important things to look for when deciding what kind of long term disability will work best for you. The first thing to look for is the policy’s definition of disability. This can easily rule out a good number of plans because many long term care insurance policies will only pay out if you cannot work at all. Most people will be looking for a plan that pays when you become unable to continue your normal job. However, some policies will only pay benefits after you are completely disabled or will only pay partially until you are totally disabled. When the payments will start is another important thing to look for. Many people will want to decide when their payments will begin. Some common options are after 31 days or after 6 months. Premiums with a late start date for payments will be lower, but many people will want a policy that starts paying out sooner, because it is difficult to continue to pay bills if you are unable to work. Residual benefits can also be a helpful option. These benefits supplement your income if your working ability is limited because of the disability. Benefits cover a range of situations, such as have to decrease the number of hours you work each week or if you are able to work full time but you cannot perform all of the tasks that are normally required with your job. This can also be called partial disability. Some long term care insurance policies also have benefits for presumptive disability. People with a presumptive disability may still be able to work but one of the following is true: they have lost the use of two limbs, they are permanently blind, or they have lost speech and hearing. This kind of insurance can be very important because many people will not be able to continue their job and will have to find other work, which may pay less. Another thing to closely examine is the length of the disability coverage. Some common lengths are two years, five years, or until your 65th birthday. Obviously, the longer the term of coverage, the higher the monthly premium will be, but coverage until 65 can give peace of mind to many young workers who are supporting a family or taking care of their parents. Inflation can have a big affect on how far your disability payments will take you, so it is important to have a cost of living adjustment or COLA in addition to your basic long term care insurance policy. Your policy is based on a fixed percentage of your pay before your disability. For long term care, it is important that your benefits keep up with inflation. With a COLA your payments will be increased each year. Increases can range anywhere from 4 to 10 percent a year. Lastly, you should look for an insurance policy with a waiver of premium. This is very common in most policies, but not all policies have them, so it is an important thing to check for. A waiver of premium would stop your monthly payments but continue to pay out your benefits if you are disabled for 3 months or longer. Long term care insurance is vital because employers are not required by law to provide long term benefits for disabled workers, only short-term benefits which could be as little as a few weeks and no longer than one year. Because one in every 5 people become disabled at some point in their life, it is very important that people protect themselves and their future with long term disability insurance, giving them something to live off of if they become disabled. However, it is equally important that the terms of payment are nailed down immediately so you are not left without benefits in the case of a disability that is not covered by your policy.
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