Private Long Term Care Insurance
Medical insurance are meant to give protection to people against risk related to high medical cost. According to a research, major population of world has not applied for such protection and therefore, is prone to high risk related to extensive medical costs. Long term care insurance is a special type of insurance that is designed to cover a small portion or in some cases, all the services required by people who are unable to carry out their daily chores. Such types of tasks include eating, dressing, bathing, shopping and cooking. Apart from these facilities, people who have some serious illness can get physical therapy treatment to improve their health condition.
Qualifying for long term care insurance coverage
The insurance policies entirely vary from person to person and an individual may get all or some of these facilities. In order to be qualified for these services, the policy holders must not be able to perform some specific number of activities like dressing and bathing. The individuals can also be nominated for Federal tax preference when he is unable to perform two out of the five specified daily living tasks without any help as stated in policy. The six daily living tasks include dressing, bathing, continence, use of bathroom, eating and moving from chair or bed. Most of the private long term care policies are tax qualified. Some old policies are not tax qualified and require different eligibility criteria.
Receiving the insurance benefits
The best part about these policies is that the policy holder will start receiving the benefits right after a short period of time which is usually set to be ninety days. The ninety days are meant for the approval of the application in which it is determined whether the applicant is eligible for the benefits or not. Once the applicant is declared to be eligible, he can get the benefits for a specific period of time that on average lasts for three to four years. There are some policies which pay certain amount of benefits and are not time dependent. Such policies define the amount that would be paid per week or per month. The limit on these amounts is made to prevent the inflation effect.
Who can get the private long term care insurance?
The private long term care insurance is not meant for any specific group or individual and therefore can be availed by agents, brokers, individuals and associations as well. The individual’s ability to buy a policy entirely depends on the insurer’s risk and underwriting criteria. The price of the private long term care insurance is made on the assumption that the individual will hold the policy for some years before they look for long term care. The premium charged is constant over the year and the same goes for the benefits as they remain fixed at the time of purchase. Therefore, in order to change the benefits, you would have to apply for a new policy which is charged according to the current age of the individual and even may be asked for underwriting. Usually, there is a significant difference in the prices depending on the age of the individual and the time when he buys the policy for the very first time.
As mentioned earlier, the insurance policies are priced with the assumption of premiums remaining constant, an insurer can increase the premium amount, and how the state has the right to place any restriction on the premium increase. The consumers are given an opportunity to make a tradeoff between the premium and the protection he seeks. Usually, the majority of us seem to face difficulty in selecting the appropriate policy which can maximize their benefits. Those who have developed the insurance policies as well as the state administration are taking a number of steps to encourage people to buy private long term care insurance. For instance, most of the states give tax incentives to those who apply for insurance policies.