Nursing Home Insurance - How to Apply For Coverage

Who is Eligible for Long Term Care Insurance? Long-term care insurance covers care in a nursing home, assisted living facility, or in home-care for individuals who do not need skilled medical care but cannot take care of themselves. The need for the care is determined by not being able to care for oneself in two or more activities of daily living, including: eating, bathing, toileting, dressing, continence, and transferring. Cognitive impairment, the mental confusion of a person posing as danger to themselves or others, is another reason for long-term care.

When to Apply for Long-Term Care Insurance? Long-term care insurance premiums are fixed when you apply. You may be tempted to buy coverage when you are still young; but by buying too early may be throwing money away for years as you cannot use the insurance until you are 65. The ideal age to buy is 59. Having said that, to qualify for long-term insurance you must be in good health. If there is a history of a chronic illness in your family, it may make sense to apply at the earlier age. Once chronic illness symptoms appear it is unlikely you will be able to get coverage.

Daily Benefit Payout You can opt to get reimbursed for the actual daily expense of your long-term care (up to a daily limit) or choose a fixed daily amount for which you will be reimbursed. The fixed amount option will lower your premium as you are not purchasing as large a benefit. Make sure your policy includes inflation protection so the fixed amount still meets your needs as the cost of living increases.

The Tricky Parts - Length of Benefit and Waiting Period Although the average length needed for long-term care is two years, if you are under the age of 65, it is recommended you purchase a four-to-six year benefit period. Indeed the longer the benefit period, the higher the premium, but you do not want to risk losing protection when you need it the most. The waiting period is much like a deductible on a health insurance policy. The longer you can wait for long-term insurance coverage, the lower your premium will be. As with the benefit period length, the waiting period can be difficult to determine. Review your finances carefully to make sure you can cover the care costs should you need them before the waiting period is over.