When you’re shopping for long-term care (LTC) insurance, here are the five key points:
The daily or monthly benefit. Your policy should cover 60 percent-80 percent of the cost of a private room in your area.
The breadth of care. For most people, a policy should pay as much for home care as for nursing home care. (An exception: elderly women living alone may not want to pay for a home care benefit if they will feel vulnerable having strangers come into their home.)
Benefit period. Pay for a policy that will provide at least three years of coverage. You also should have a plan to transfer assets and eventually qualify for Medicaid after a three-year waiting period.
Waiting period. The longer the waiting period before benefits begin, the lower the premiums you’ll pay. At, say, $5,000 per month a 100-day waiting period will cost you more than $15,000, out-of-pocket. If you’re not willing or able to bear that expense, choose a 30-day waiting period.
Inflation protection. Most people will want this protection. Simple protection will cost less than compound protection and may well be adequate in today’s low-inflation economy.
