RSS Feed

Archives

  • Categories

  • Long-Term Care: Tips on Selecting the Right Insurance Provider

    July is National Retirement Planning Month; a great time to assess your retirement goals and make sure you have the right plan in place to get there. One often overlooked part of the retirement planning process, however, is long-term care. Did you know that 70% of people over the age of 65 need some type of long-term care services? Or that 67 % of adult women have provided long-term care to someone in need? Providing long-term care can have a serious impact on a woman’s long-term finances and is something she herself may one day need. This month’s blog series will focus on the long-term and why it’s one of the most important investments women should make when planning for retirement.

    Now that you understand the need for long-term care and the costs associated with long-term care insurance, here are some helpful tips to keep in mind when selecting a long-term care insurance provider. Long-term care insurance can be one of the most complex types of insurance you may ever purchase, so make sure you keep these details in mind.

    To begin, you may be wondering where you should go to buy long-term care insurance. Long-term care policies can be purchased on an individual basis, and in some cases, through group plans offered by employers. Most policies pay a fixed dollar amount, usually $50 to $250 per day—for long-term care services.  Policyholders can choose the amount, the length of time benefits will be paid, and the deductible period. The cost of long-term care insurance partly depends on the age of purchase: it generally costs less at a younger age.  Typically, the premiums purchased before the age of 65 are much lower than policies purchased after the age of 65.

    Find out first if your employer or retiree association offers a plan. If so, ask about the coverage and costs. Shop around for an individual policy and compare benefits and costs of different policies before you buy anything. Search for the best deals but also be realistic.  Select a provider that has at least 10 to 20 years of history dealing with this type of insurance. Make sure you check their company’s ratings by visiting www.moodys.com or www.standarandpoors.com. Typically you should try to select a company with one of the four highest ratings to be on the safe side. Additionally, according to Steve Vernon over at MoneyWatch, you should ask how many rate increases the insurance company has imposed on existing long-term care insurance policyholders for the past five or 10 years. Several recent rate increases can be a red flag.

    You also want to make sure that the policy covers a large range of care options. This includes home health care, adult day care, assisted living facilities, residential care facilities for the elderly, and nursing homes. It is hard to know exactly what your long-term care needs will be, so make sure you will have as many care options as possible as you age. Lastly, be sure to read over your policy carefully before making any commitments. Know what you are signing up for and what benefits you have the right to with your long-term care insurance.

    Thanks for taking the time to learn more about long-term care this National Retirement Planning Month! Remember don’t wait too long to put this information to good use. Insurance premiums increase substantially as you age and as your health declines in old age, so the sooner you purchase long-term care insurance the better.

    If you would like more information on purchasing long-term care here are some additional resources:

    Leave a Reply

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

    Read More