Wednesday, November 17, 2010

The Benefit Period in Long Term Care Insurance

The benefit period plays a significant role in determining the price of long term care insurance premiums. By having precise plan and sufficient knowledge, you can maximise your health coverage while save on LTCi premiums at the same time.

The long term care insurance benefit period is the duration or length of time that the insurer will pay for your care. The period is often translated in years that can range from two to five years and more. The unlimited benefit period means the policy will pay out benefits as long as you want. It is always crucial to predict the future risks and average number of years for a typical nursing home stay to avoid overpayment and other unlikely financial mistakes.

Some policies follow a "pool of money" approach. The benefits for this type may be higher than the actual period, even if it is expressed in years in the policy. For instance, if you have a policy with five-year length and pays out $100 a day, but you use only $50 per day, the amount that has not been used will be kept in a pool of money and your policy. Also, some policies can pay maximum dollar amount rather than the benefit period.

The daily benefit amount, on the other hand, is the maximum dollar amount that a policy pays out per day that can range from $10 or more. However, other policies can pay benefits on weekly or monthly basis. This provides flexibility for consumers on how they would like to pay their benefits.

If you opt for a daily benefit amount, you should learn all the in and out of this feature. You need to consider the costs of institutional care in your area and the types of services offered. The prices are higher in larger metropolitan areas such as Texas, Washington, New York, Florida, and California. It would be better to canvass the costs of nursing homes, assisted living, and home care to determine how much daily benefit you deserve accordingly. The insurance agent must inform you about the costs and help you decide on the suitable daily benefit.

Many insurance experts advise to get a daily benefit that pays at least half of the costs, and the rest will be paid with out-of-pocket to prevent expensive premiums. However, you can still get full coverage if you have enough to pay the premiums. It is still better than having no coverage at all.

Moreover, there are some factors to consider when determining the appropriate benefit period. If you have family history of Alzheimer's or dementia then a longer benefit period of about five to 10 years is recommended. Nevertheless, longer benefit period means higher premiums.

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