Are All LTCi Policies the Same?
A prospective client asked me recently if all long term care insurance policies are basically the same. As with many things in life the answer is yes and no! All long term care insurance companies allow an applicant to select his/her core benefits: a daily or monthly benefit (usually between $50/day to $400/day or $1,500/month to $12,000/month), an inflation component (5% compound, 3% compound, 5% simple, CPI, etc), an elimination period (a deductible based upon a number of days that usually ranges from 0 to 365), and a benefit period (that usually ranges from 2 to 10 years and some companies still offer a lifetime benefit period). Where it gets complicated is when you need to make decisions about options that aren’t the same with all companies or that might not be available with all companies. That would include but is not limited to: cash alternative, survivorship, return of premium, shared care, international coverage, informal care, indemnity, calendar day elimination period, dividends, etc. Whether or not you want your policy to contain any of these options requires that the long term care insurance specialist you are working with informs you about what they are, how they work, and what they cost. And remember that one size does not fit all with most things in life including long term care insurance!