Trying to figure out your insurance choices can feel like getting lost in a maze. But don’t worry, because we’re going to explain how standard long-term care insurance (LTCI) works today. Before you decide if standard long-term care insurance is the right choice for you or your family, you need to know the pros and cons.
What is traditional insurance for long-term care?
Traditional long-term care insurance (LTCI) is a type of insurance that was made to cover the costs of long-term care services, most of which are not covered by regular health insurance or Medicare. Some of these services may include help with daily tasks like bathing, getting dressed, and getting in and out of bed. Other services may include skilled nursing care.
Long-term care insurance has both pros and cons. There are three main kinds of long-term care insurance.
- Most standard LTCI plans are either reimbursement or indemnity policies. Reimbursement policies pay for real costs up to the daily or monthly benefit amount. Indemnity policies, on the other hand, pay the full amount no matter how much was actually spent.
- Policies for partnerships: These policies protect assets. If you need Medicaid services, you can keep an equal amount of your assets if you have a partnership policy that pays out benefits.
- Hybrid or Long-Term Care Insurance: These combined LTCI plans blend long-term care benefits with life insurance. If you never need long-term care, the death benefit will go to the people you choose.
- Insurance that has been around for a long time For And Against
Pros of Long-Term Care Insurance the Old Way
- All the bases are covered: Traditional LTCI usually covers the most long-term care services, such as in-home care, assisted living, adult daycare, respite care, hospice care, nursing home, Alzheimer’s centers, and more.
- Protection against inflation: Many standard LTCI plans include protection against inflation, which makes sure that your payment keeps up with the rising cost of care.
- Tax perks: With traditional LTCI insurance, the premiums you pay and the benefits you get are often tax-deductible or not taxed at all.
Cons of Long-Term Care Insurance the Old Way
- Costs are going up: One of the biggest problems with long-term care insurance is that the fees can go up over time, which can make it hard for some people to pay.
- Use-it-or-lose-it: If you don’t need long-term care, you lose all the money you put into the policy since standard LTCI doesn’t give back any of the money you paid in.
- Limited Benefits: With traditional LTCI, the types or amounts of services covered may be limited.
Traditional Reviews and Providers of Long-Term Care Insurance
It’s important to do your study before buying any kind of insurance. Look at reviews of standard long-term care insurance to find out what customers have said about their experiences. Nationwide, Mutual of Omaha and Transamerica are all well-known providers of standard long-term care insurance. Each company has pros and cons, and their rules are different, so you need to do your research.
The Cost of Long-Term Care Insurance the Old Way
Traditional long-term care insurance costs can change a lot based on your age, health, the amount of coverage you choose, and the insurance company. Complete insurance for a person age 55 could cost between $2,000 and $4,000 per year, on average.
Conclusion
Traditional LTCI can be a great way to protect yourself and your assets from the high costs of long-term care. But not everyone is a good fit for it. The pros and cons of long-term care insurance show how important it is to know what you’re getting, do study different companies, and weigh your choices carefully.
