Retirement & Financial Planning Report

Long-term care policies, available from insurance companies as well as through the federal FLTCIP program, offer a wide variety of features. Some policies may pay for care not only in a nursing home but also in an assisted living facility or at the home of the individual who needs care.

Policies may include cost-of-living adjustments, which would increase future benefit payments. Some companies offer LTC policies that cover both spouses at a discounted rate, versus two separate policies.

There also are life insurance policies that double as LTC insurance. That is, long-term care expenses will be covered, if necessary, and the policy’s death benefit will be reduced. If long-term care never is required, the insured individual’s beneficiary eventually can receive the full death benefit.

For any type of LTC insurance, it may make sense to buy when you are in your 50s or 60s. Ongoing premiums will be lower, compared with policies bought at older ages.

When you’re shopping for LTC insurance, certain tactics can reduce your policy cost.

* Reduce benefits. A policy that pays benefits as long as you need long-term care can be very expensive. Instead, a policy with a five-year maximum payout will be less expensive; few people will need more than five years of long-term care.

* Wait longer. You can cut costs by extending the period before you collect benefits. A policy with a 90-day waiting period will be less expensive than one with a 20-day wait, as long as you can afford to pay for 90 days from your own resources.

* Avoid automatic inflation increases. A policy that increases your benefit each year from $100 a day to $105 to $110, etc., will be very costly. Instead, a “future purchase option” will allow you to buy more coverage, if you need it, even if your health has declined.

More on the Federal Long Term Care Insurance Program at