Most LTC insurance products are designed to provide coverage for both nursing home expenses and home health care.
It’s important to plan for these expenses, but the traditional LTC insurance model is not always the best option for the consumer.
Premium increases have forced many policyholders to reduce their benefits or cancel their coverage altogether. People who have been paying premiums for years can no longer afford their policies, which has left them with no way to plan for LTC expenses.
Part of the reason why LTC insurance policies can be so expensive is due to the high cost of staying in a nursing home full-time.
However, most people who need long term care services do not need full time care. Many individuals can receive adequate care at their own home from a family member or part-time nurse.
One way to bring down the cost of LTC insurance is to focus on coverage for part-time home health care rather than full-time nursing home expenses.
If you are planning only for part-time home health care and not nursing home care, you can buy a less expensive policy with less benefits.
But when it comes time to claim your LTC benefits, how do you qualify? How does the insurance company handle claims?
The benefit triggers are the same on all LTC policies: you must be unable to perform 2 of 6 activities of daily living (ADLs). These include eating, bathing, dressing, toileting, transferring (walking) and continence. Severe cognitive impairment is also covered.
Although the benefit triggers are the same for all policies, the process of actually receiving benefits varies depending on the company.
All traditional LTC policies operate on a ‘reimbursement model’, meaning that you must pay the expenses yourself and then submit a receipt to apply for reimbursement.
The reimbursement model can be frustrating for customers, as it allows insurance companies to drag their feet when paying claims. Take this customer review of Genworth, for example:
Writing in for the individual I care for who took out a policy 15 years ago. Was recently diagnosed with Alzheimer's Disease. After months of phone calls and paperwork they refuse to pay for any home care which is provided for in the policy.
Louise - Gainesville, FL 08/15/2017
When using an LTC policy to plan for home care expenses, you want to have as much control of the money as possible. Some hybrid LTC policies offer an ‘indemnity payout’ model instead of the standard reimbursement model.
The indemnity payout is much better for the consumer because the company pays you the amount of LTC benefits directly when you qualify. There is no need to submit receipts or deal with the hassle of reimbursement for specific expenses. The company pays you in installments or a lump sum, and you decide how to allocate the money.
To learn more about indemnity payouts and the benefits of hybrid LTC insurance, give us a call at 1-866-365-6558.
Our agents can provide competitive quotes for both hybrid and traditional LTC insurance. We are dedicated to helping people find reliable policies that will allow them to protect themselves and their families.
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