Long Term Care Insurance

Long Term Care insurance was developed to provide people with some protection against the significant expenses associated with a prolonged illness that requires special care. For most consumers, the purchase of long term care insurance policies requires serious consideration. The policies can be difficult to understand; a result of widely varying benefits and costs, as well as confusing jargon and phrases.

Before making a decision about purchasing long term care insurance, there are some factors you may want to consider:

  • premium costs
  • length of time the company has been writing this type of insurance
  • the insurance company's payout history
  • company history of premium increases
  • type of services covered under policy
  • number of years the policy will continue to pay benefits
  • company policy towards pre-existing conditions
  • conditions under which premiums are/may be waived

In addition, you may want to ask the following questions:

  • Are optional benefits available under the policy, and if so, at what cost?
  • How much will the policy pay per day? Is that rate indexed for inflation, and if so, how is the indexing calculated?
  • When does payment coverage begin? On day 1, day 30, or day 100?
  • Does the policy have a maximum lifetime benefit? If so, what is it?

Here are a few "shopping" suggestions to use when purchasing a long term care insurance policy:

  • Do not buy more than one long term care policy
  • Carefully compare the policies you are considering, as they are NOT all the same
  • Check with several agents and companies before you make your purchase
  • In Montana, an agent is REQUIRED to provide an outline of coverage at the time he/she contacts you. If an agent promises to provide information later, you probably should not want to deal with that person
  • Do not let anyone scare you or pressure you into making a quick decision
  • Invite the agent back for a second visit, and tell him/her you would like a trusted friend or family member to review the policy information before you purchase a policy. If the insurance agent is unwilling to honor this request, do not purchase insurance from the agent
  • Never pay the agent in cash: always write a check payable to the insurance company, and get a receipt
  • Get the name, address and telephone number of both the agent and the company they represent
  • Finally, it is important to remember that, if you purchase a policy, you have a 30-day "free-look" period. Be sure to thoroughly review the policy, and make sure it is what you thought you were purchasing

As you might imagine, long term care financing can be complicated and expensive. In Montana, costs for long term care vary, depending on whether you live in a rural or urban area. Generally, nursing home care in Montana costs between $4,000 and $7,000 per month. Home-based health care services may also be costly. In Montana, Medicare pays between $40 and $100 per home health care visit. The exact cost will depend on the type of service you receive and the area of the state in which you live.

In Montana, "A Shopper's Guide to Long-Term Care Insurance" is an excellent online resource guide, and is available at your request. This guide has been produced by the National Association of Insurance Commissioners (NAIC) and includes many tips on choosing a long-term care insurance policy.