Buying long-term care is a process, and there are several steps you need to take and a number of decisions to make.
Calculate How Much Coverage You Need
Long-term care insurance is not a one-size-fits-all product. You need to decide on the amount of coverage you’re going to purchase, and that would be based on your needs and the cost of care in your state.
Apart from your needs and the price of long-term care in your area, you also need to look at your financial strength and how much premiums you can afford. Determine if you are going to rely on the policy to foot all your care expenses or if you’ll self-insure for the portion of the cost.
Decide When to Buy
The ideal time to purchase long-term care insurance is during your 50s or early 60s. This is because premiums are lower for younger buyers.
Experts warn against waiting too long to purchase a policy. Buying at a later age will not just increase your premiums, it will also lessen your chances of qualifying for a policy, most probably due to health conditions.
According to an industry report, only 1 in 10 applicants who are below 50 are declined, whereas 25 percent of those between 60 and 69 are turned down. Chances of qualifying further slim down for those who are in their 70s as about half of applicants in this age group didn’t qualify for a policy.
In order to get the most suitable policy for you that is priced at the reasonable rate, you need to take time in comparison shopping.
Request different quotations or cost estimates from different insurers. Make sure that you are making an apples-to-apples comparison, meaning you should be looking at cost estimates for two identical levels of coverage. Remember that two companies can have a price difference of 60 to 90 percent for policies that are practically the same.
Apart from the cost, you also need to look at the reputation of the insurance company you’re planning to buy from. Make sure that they have the financial strength to stay in business for a long time and pay for claims today and in the future. You can check their performance based on ratings done by independent firms such as AM Best and Standard and Poor’s. You can also check with your state insurance department to see if any complaints or cases filed against them and how they were able to resolve these issues.
Seek Professional Advice
If there’s even one word that you don’t understand in the policy, don’t buy it just yet. You need to know exactly what you’re buying, so before you hand in your first premium payment, make sure that you fully comprehend what’s included and excluded in your chosen policy.
Seek the advice of professionals who are well-versed in insurance terminology and ask them to explain to you the parts that you’re having a hard time to understand.