Long Term Care Policy Features / Options

If you want to obtain the best insurance policy there is, you must first be familiar on the key features that a long term care insurance plan can have. You have the option to include the ones you need and exclude the other elements that you deem unnecessary.

These are the different features of a long term care policy:

Alternative Plan of Care

This feature lets the policy holder receive benefits such as care or services that are not particularly laid out in the insurance coverage.

Bed Reservation

Should you need to be hospitalized or go on a holiday, having a bed reservation feature in your policy assures that your bed in a facility or community will still be available for you upon your return.

Benefit Period

This refers to the total amount of time by which you the insurer can pay of your claims and benefits. This can be set for a certain number of years or you can choose to be covered for the rest of your life. The benefit period is parallel to how much your premium will cost.

Daily Benefit

This refers to the maximum amount that your policy can pay off on a daily basis.

Restoration of Benefits

This insurance rider allows your maximum benefit to be restored if you are not going to require services again for a certain period of time.

Elimination Period

An elimination period is commonly referred to as the waiting period. This is the amount of time that you have to shoulder your initial expenses before your benefit start paying off claims. A long elimination period can lessen the cost of your premiums.

Spousal Discount

This feature can reduce the cost of a policy if partners or a married couple decided to buy long term care insurance from the same company.

Inflation Protection

An inflation protection is a crucial element of long term care insurance. With the rising cost of long term care and the likelihood that you’ll need services at least a decade from now, this ensures that your benefits can keep up with rate increases.

Non-forfeiture Benefits

If you can no longer afford the premiums, this option prevents you from losing all the money that you have already paid.  An amount based on your total payment will be returned to you.

Waiver of Premium

Once you start receiving benefits, this option can allow you to put paying of your premiums on hold. Say you started receiving care; you can temporarily stop paying for your premiums while you are still being cared for. In some cases, this feature allows you to stop paying once you’ve triggered your benefits.

Tax Qualified vs. Non-Tax Qualified

Benefits from a tax-qualified insurance policy will not be considered as a form of income; therefore it will not be taxed. More so your premium can be considered as a medical expense and can be a deductible in your federal taxes just like that of a health insurance.

A non-tax qualified policy doesn’t have this feature, but benefits can be triggered under less strict conditions. For instance, in a tax-qualified policy, “medical necessity” is not qualified as a benefit trigger. Meanwhile, a non-tax qualified policy can pay off benefits for that reason.