Long Term Care Insurance

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This a type of insurance which is mainly sold in the United States of America and helps to provide care for a long term and bear all the costs. This type of insurance care usually provides cover for the services that are not covered by health insurance, Medicaid or Medicare.

People who are generally not sick in the normal sense however are physically challenged and cannot perform their daily routine properly like bathing, eating getting in and out of bed or chair etc require long term care.

Long term care is not always for a long period. The care will be needed by the person for a short span of time to recover from a surgery or accident.

The risk of long term care being needed by a person increase as they become older. This is needed in the States where the Medicare policy does not cover long term expenses, however Medicaid will cover the expenses if the a person is not capable of paying for the expenses. 

Benefits

Medicaid does not pay for assisted living and for long term care in the United States. However it does provide people with necessary medical help for people who have low incomes and cannot afford to pay for their medical expenses. However people with such terminal illness or can't move and do their daily routine need to be kept at home all the time or at a private room where they can be looked after by someone.

Long term care insurance once purchased can helping in paying for home care and many a times for day one when it's needed. This type of insurance pays for a care taker who will be needed to assist you and help you in taking care of yourself when you are not able to move from the bed. Long term care is paid by long term care insurance policies such as adult daycare, respite care, hospice care etc.

Some of the other benefits of long term insurance care are;

1. Old people who believe in not taking help from their children and want to be self reliant often choose for this type of policy, where cover them selves with a long term care cover and at old age it will help them stay self reliant and take care of themselves.
2. Tax benefits are given on the amount of premiums that are paid on long term care insurance. This is usually decided on the basis of the age of the covered person.

Types of policies

There are basically two types of long term care policies available in the United States; these are different in term of their qualification to pay tax.

Non Tax Qualified (NTQ):

This was also known as traditional long term care insurance. For the last 30 years this type of long term care insurance has been sold. This type of policy also has medical trigger involved that is, a qualified medical physician or doctor from the insurance company should state that the person insured needs log term care and only then will the policy pay for the expenses. However the benefits received from it are taxable by law.

Tax Qualified

This type of long term care policy does not require and form of medical necessity trigger to be involved in the clause. However in this type of insurance policy it is necessary for the insured to require care for at least 90 days and also should not be able to perform any 2 of the following daily activity, like dressing, bathing, eating etc without any help. The doctor should also have a plan of action for the patient for at least the 90 days. The benefits received from this type of policy are not taxable.

These days the number of non taxable policies is reducing day by day. The reason for this is that most of the people buying this policy wish to be eligible for tax savings while buying tax qualified policies. One drawback of tax qualified policies are that the benefits can only be received after a time fixed by law.
A policy is guaranteed to be renewable for life once a policy is purchased by a person and the language in which the policy is made cannot be changed by the insurance company. It can never be cancelled by the company except when wrong information is provided by the insured on the opening form of the policy, this again can be done only in the first 2 years of taking the policy.

The benefits received from the company are paid on reimbursement basis.
A group long term policy is not renewable for sure. The benefits received from group long policies are not taxable and are usually are Non-Tax Qualified (NTQ). Group plans usually have a clause give the company the right to change the premium to be paid from time to time. Some of these policies have a term by which the company can cancel the policy as and when they want and it is preferred that such policies are not taken.
Some of the retirement policies have a long term care policy included in them. However these types of organizations are not regulated by the state insurance departments. They charge a higher rate of interest on these polices and the premiums are also higher.
The rates to be charged on long term policies are determined on the basis of four factors namely the age of the person, the daily requirement of the person, and the duration of the policy and the health rating of the person. Some companies also provide a discount for people who take the policies for their spouses.
The premiums for these policies can be paid in multiple ways such as annually, monthly, half yearly and quarterly. The premiums may vary depending upon the way the premiums are paid.

Eligibility and deductibles

These policies usually have a waiting period or elimination period that may change from 20 day to 120 days. The policies require the insured to provide a proof 20 to 120 days of the amount that is paid. The policies may even require the claimant of a long term care policy to show the proof in advance before a year or so of the benefit. This is a reason that one should choose a policy which is for longer period and a policy which has lower premium.

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