Stretching Your Long Term Care Insurance Benefit Period

Perhaps you have been told many times that the longer your long term care insurance benefit period the more you pay in premium? So why not cut it short then? rnIf you analyze all the features of a long term care insurance (LTCI) policy you’ll find that everything functions as one. Your maximum daily benefit amount and the manner in which you receive your benefits, for instance, affect your coverage period. rnAlthough LTCI specialists keep saying that you’ll spend more on the premium of your coverage if you will go for a higher maximum benefit amount, longer benefit period, and short elimination period, it does not mean you have to reduce all the components of your policy just to save on your premium. rnAll you have to do is study the daily cost of LTC facilities or services in your area as this will impact your overall coverage. So if you have a greater chance of needing nursing home care look up the current daily cost of a nearby nursing facility for this will serve as your guide when you later determine the maximum daily benefit amount of your LTCI policy. rnSuppose the daily rate of a private nursing home room in your area is $119, on average, but you won’t be requiring care until the age of 70, perhaps you can put your daily benefit amount at $200. Once you start acquiring nursing home care afterwards and the total amount of your daily nursing home expenses turns out to be only $150, at least you get to put away $50 each day which subsequently extends your maximum benefit period. rnWhat Affects Your Long Term Care Insurance Benefit Period? rnAccording to LTCI experts, those individuals who are expecting to require five to 10 years of care are advised to invest in a policy with a higher maximum benefit amount than a longer benefit period, because choosing the latter will make them at risk of bigger out-of-pocket expenses. rnTo explain that further, here’s an example: rnA 50-year-old woman bought a policy with a maximum benefit period of 10 years because her odds of acquiring Alzheimer’s is 2:1 since her father and some aunts succumbed to the mentioned disease. Meanwhile, she thought settling for a maximum daily benefit amount of $150 is a wise move since the daily rate of a nursing home at the time she purchased her policy was only $100. rnWhen she turned 75, a benefit trigger occurred and the woman finally got to claim her LTCI benefits. Unfortunately, the daily cost of a nursing home has increased to $210, which is about 40% higher than her policy’s daily benefit amount. So, she was left with no choice but to fork out $60 every time she would acquire care in a nursing facility to foot the excess amount of her bill as this is no longer covered by her policy. rnThe sad truth is that she will be spending $60 out-of-pocket every time she acquires nursing home care for the next 10 years. rnHad she opted for a higher maximum daily benefit amount and a shorter long term care insurance benefit period, she would’ve been able to stretch her coverage without compromising her personal resources. rnTo receive sound advice on LTCI shopping, contact your LTCI broker.