Do You Need All Those Long-Term Care Insurance Options?

Author: Duane Lipham, CLTC

Long-term care insurance (LTCI) policies are very different from most other kinds of insurance. As a result, even the foundational features of these policies can require taking some time to understand before making your final decision.

But what about all those other options and features that are not built into the policy and require you to pay extra to get them?

In my opinion, LTCI policies are best kept simple. If you have done your homework on setting up the foundational features of the policy, you have done 90% of your work in most cases. It may not be a bad idea to look into those other options if you feel that you can afford to spend more on your care, but it's wise to examine whether they are truly going to be cost effective in your case.

A good way to accomplish this is to narrow down your selection to just 2-3 carriers that you feel most comfortable with and get quotes on just a straightforward policy setup with no extras or options added. Then add on the options that you may be interested in one at a time and get a new quote. This will tell you exactly how much extra you can expect to pay for these options. Once you have those figures it's much easier to decide if the options you are considering are really worth pursuing further.

Here is a list of some of the most popular options in LTCI policies:

1. Return of Premium - this option allows you to receive back some or all of the premiums that you pay into the policy if you either decide to cancel the policy or if you expire without using all of your benefits. This is often a very expensive option.

2. Survivorship - this option's benefits can vary from carrier to carrier, but typically it says that if the policy premiums have been paid for a specified period of time, often ten years, and one spouse expires, the surviving spouse's policy is considered paid-up with no further premiums required.

3. Restoration of Benefits - this provision restores all of the benefits paid out for care if a policyholder fully recovers and does not suffer a relapse for a specified period of time (usually six months).

4. Waiver of Home Health Care Elimination Period - this option reduces the elimination period (the amount of days that you pay for your own care before the insurance company starts to pay) to zero. This means that it starts to pay from the very first day of services rendered if the care is received at home.

There are other options that can be considered when shopping for LTCI too, but in my experience the most common danger is getting bogged down in these extra features that do not really impact the quality of your future care nearly as much as the foundational features. That's why having a knowledgeable and experienced agent help you with the process can often cut down on much of the confusion surrounding these options so that you can select the policy and features that suit you best.