Family Living Focus: Checklist for Selecting Long Term Care Insurance

Gail Gilman, Family Life Consultant, M.Ed., C.F.C.S. and Professor Emeritus, University of Minnesota    

Long term care insurance is the answer to ensure your retirement funds and provide protection so that the money stays intact and at the same time insurance provides a way to pay for elder care services.

There are many long term care insurance companies selling different policy options.  It can become very confusing.  For each policy, there are a variety of benefit combinations for home care, assisted living, skilled nursing care facilities, waiting periods, payment amounts, inflation riders, and the list goes on.

You can take the time to do your own research or visit with a long term care insurance agent.

Here is a checklist of some of the things you need to know before you purchase a policy.  The more “yes” answers you get the better off you are.

  Long Term Care Insurance Checklist

1) Is the insurance company rated by A. M. Best (the rating company) with a rating of at least A, A+, or A++?

2) Is it a large, diversified company with deep pockets and selling more than just long term care insurance?

3) Is the insurance representative an expert in long term care insurance?

4) Does the representative have a degree and/or industry financial designations?

5) Does the representative own a personal long term care insurance policy for himself or herself?

6) Is the policy tax qualified, and if not, do you understand the ramifications?

7) Are there at least 6 ADL’s (Activities of Daily Living) allowed for in the benefit certification?

8) Does it allow “standby assistance”?

9) Is it a “pool of money” as opposed to a “stated period”?

 10) Do you understand how the elimination period works? (This is extremely important.)

11) Does it have prohibitive cost containment provisions?

12) Is there any “capping” or other future reduction of automatic benefit increase riders?

13) Do you understand how the waiver of premium works?

14) Does the assisted living facility benefit pay the same as for a skilled nursing care facility?

15) Are you buying adequate home care coverage?

16) Does the company have a history of premium rate stability without periodic increases?

17) Does the policy pay for homemaker services?

18) Does the policy offer an alternative plan of care for services that don’t exist today?

 Be sure to watch for more Family Living Focus information from Gail Gilman, Family Life Consultant, M.Ed., C.F.C.S. and Professor Emeritus – University of Minnesota in next week’s paper.