Benefit Period And LTCI Premiums PDF Print E-mail
Written by Maria Smith   
Wednesday, 27 October 2010 21:43
Based on the knowledge of the average stay at a nursing home and at an assisted living facility you can decide the coverage and the benefit period of your LTCI. You can find out ways to minimize your LTCI Premiums based on this factor. While the average stay for nursing-home residents is about 28 months, it is about 27 months for residents in assisted living facilities.
by MariaSmith


Based on the knowledge of the average stay at a nursing home and at an assisted living facility you can decide the coverage and the benefit period of your LTCI. You can find out ways to minimize your LTCI Premiums based on this factor. While the average stay for nursing-home residents is about 28 months, it is about 27 months for residents in assisted living facilities.

Keep in mind that many receive some kind of long term care before or after their stay in a nursing home or an assisted living facility. 40% of residents in acute-care hospital or a short-stay nursing facility move to assisted living facilities. About 34% of assisted living facility residents move to a nursing home after their stay.

Many received care in their own homes first before moving to nursing homes. According to studies, on an average a 65 year old today will need some kind of long term care services for at least three years. A LTCI policy with three year coverage is most popular because of the statistics provided above.

When there is a family history of Alzheimer's disease and other such long-lasting conditions a longer benefit period is suggested. 20% of today's 65 year olds need long term care for more than 5 years. Longer benefit periods result in higher premiums. Generally benefits for a lifetime cost more than twice the premiums of a three year benefit period.

The rule of thumb is to buy a policy with benefits that are 'short and fat' rather than 'tall and thin'. For example if you buy a short and fat policy with a $200 maximum daily benefit for three years, you are actually buying a policy of $219,000 worth of long term care. Since your daily maximum is $200, you can not use more than $200 per day. You extend your coverage for more than three years if you use less than your daily maximum amount (i.e. $200).

Your daily maximum benefit is $100 for a 6 year benefit maybe an example of a 'tall and thin' policy. You can not receive more than $100 for your daily care with this policy. You will be forced to pay $50 out of pocket for every day of long term care if your daily care cost is $150.

As very often care is first received in the home look for a policy with a zero day waiting period for home care but has a longer waiting period for nursing home care. As your premiums can increase significantly if you lower the waiting period for all types of care, consider paying extra for a rider to eliminate the waiting period for home care.

If you are married buying a shared benefit policy where each spouse buys a three year benefit, but each can use from the other's benefit period if one needs a longer period than the other, is a good idea to reduce premiums. For example, if one needs 5 years of coverage the spouse can use the remaining one year.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

Want to find out more about long term care insurance, then visit Maria Smith's site on how to choose the best long term care insurance policy for your needs.