It is a good idea for anyone to look closer into long-term care insurance. This is because Medicare nor any other health insurance company will pay for long-term care services for an extended period of time if you need it in the future. Also, according to government statistics, after you turn the age of 65, there is around a 70% chance that you will require some form of long-term care. This kind of care can deplete your life savings quickly, so it simply makes sense to make long-term care insurance part of your financial plan.
When you start looking for a long-term care insurance policy, you may become confused by some of the terminologies. There are a few basics that you need to know in order to break down the fundamentals of long-term care insurance. I was speaking with a friend over at Atlanta Gutter Repair about this not too long ago regarding his mother.
When it comes to long-term care benefits, there are four basic components you need to understand that influence your monthly costs:
- Maximum benefit: you need to know how much total maximum benefit is available under the policy you are looking at. The maximums can range from $100,000 to more than $500,000. Your benefits will continue to be available until that maximum benefit has been reached.
- Limit: you will want to know what the monthly limit is on how much benefits you can access from your maximum amount. An insurance company doesn’t pay out your money in a lump sum. Instead, you can get smaller amounts of your benefits each month based on their monthly maximum they have predetermined.
- The rate of growth: this tells you how much your benefits grow over time. 3% is the most common growth rate today. The growth rate can greatly increase the benefits you have years from now.
- Deductible: just like most other insurance policies, long-term care insurance has a deductible. Your deductible determines how much money you must pay out of your own pocket before any benefits from the policy are paid. With long-term care insurance, the deductible is determined by days, not money. The deductible typically used as around 90 days, meaning you have to pay for the first 90 days of care out of your pocket before you can begin using your benefits.
Hopefully, you now have a better understanding of long-term care insurance. If you need further help, feel free to contact us.