How do I compare long-term care policies?
Long-term Care Insurance
First of all, long-term care insurance is a world apart from products like term life and automobile insurance. Many factors contribute to a much more complicated picture. Among these are:
- the complexity in defining need for long-term care
- the patchwork private/public insurance landscape
- the high cost of private insurance
- the potential for significant future changes in premiums and benefits that go along with a relatively immature insurance market
- Inflation protection (5% compounded) is expensive but almost always worth it. Agents may push cheaper options, to make the policy appear more affordable, but chances are you'll end up with insufficient coverage or higher premiums over the long run.
- Look at how many activities of daily living (ADLs) the policy recognizes and how many you need help with to qualify for benefits. The more ADLs listed and the fewer required to get benefits, the better. Bathing is usually the easiest to qualify for, so be sure it's on the list.
- Nursing home costs vary widely by region of the country and private versus shared room. Be sure to