Long-term care insurance—whether purchased through the federal FLTCIP program or elsewhere—can be expensive. The options available in such insurance can be tailored to hold down the premium costs but keep these thoughts in mind:
1. The daily or monthly benefit. Your policy should cover at least 60-80 percent of the cost of a private room in your area. If you couldn’t afford to pay the balance from other assets, you might want to think about purchasing 100 percent coverage.
2. The breadth of care. A policy should pay as much for home care as for nursing home care unless you would feel vulnerable/uncomfortable having strangers come into your home and thus do not want in-home care.
3. 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.
4. 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.
5. 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.