2 “gotchas” you need to watch out for when choosing your “Daily Benefit”

Gotcha #1: Some long-term care insurance policies have different ways of determining the Daily Benefit depending upon the setting in which you are receiving care.

For example the:

  • Nursing Home Daily Benefit may be $200,
  • Assisted Living Facility Daily Benefit may be 70% of that (e.g. $140), and
  • Home Healthcare Daily Benefit may be 50% of the Nursing Home Daily Benefit (e.g. $100).

Group long-term care policies are designed this way more often than individual long-term care policies.

If home healthcare is very important to you, when comparing policies make sure you compare how much each policy will pay for care you receive at home–don’t just look at the nursing home daily benefit.

Gotcha #2: The Daily Benefit you choose may not cover the full cost of your care

For example, if your care costs $250 per day, but your Daily Benefit is $200 per day, the policy would pay only $200.  You would need to pay the other $50 from your own income and/or savings.

When choosing a Daily Benefit, do not assume that all your income will be able to go towards the cost of your care.  If you receive care at home, you’ll still have most of your usual household expenses.  If you’re married, your spouse may still need most of the household income to cover regular living expenses.

To see the cost of care services in your area, click the following link to access the most recent government survey:

http://longtermcare.gov/LTC/Main_Site/Tools/State_Costs.aspx

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About Scott A. Olson

Scott A. Olson, is the author of “The Guidebook for Making Long-Term Care Insurance Easier.” He is a licensed insurance agent and has specialized in long-term care insurance since 1995. He is licensed to sell long-term care insurance in over 40 states. Scott was born and raised in New Jersey and attended Rutgers University. Scott was a caregiver for a close relative for two years. That personal experience has made him acutely aware of how to help his clients design and choose a long-term care policy that will benefit them when they need it the most. Scott and his wife Carolyn live in Redlands, California. Scott and Carolyn have four sons.