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Fully Understanding Long Term Care Insurance

If you've prepared for the future by purchasing a long-term care policy, then you should feel comfort in the fact that you will be able to afford care in the event you need it. Standard health insurance doesn't cover things like caregivers for bathing, getting dressed, and safely getting in and out of bed. Long-term care policies cover this, but you have to understand your policy in order to maximize your benefits.

Elimination Period

Most long term care policies have an elimination period that prevents the immediate release of benefits. During the elimination period, you have to pay for your own services. For complete long term care services, this typically means many thousands of dollars a month. 

The elimination period serves as a deductible, and it is one of the variables that changes the cost of your long term care insurance policy. The longer the waiting period, the less the monthly premium. 

Increasing your elimination period might sound like an easy way to save money in the short-term. However, some policyholders end up in a very tough spot if they don't have enough savings. That is why it is best to make sure you have the savings put away ahead of time to cover the elimination period. 

Use it, Or Lose It

One of the biggest complaints about traditional long term care insurance is that you lose the money invested in caregivers if you never need care. In other words, you're paying for something that you only get if you end up needing long term care. It feels like money thrown away. 

There are 8 million active policies today, however only 300,000 are being used Out of the 8 million, 4 million are eligible for some form of care today. 50% of policyholders die before using any benefit. 70% of policies will end because the policy owner passed away, not because they ran out of money. Statistics show that 61% of the time, the spouse providing the assistance pre-deceases the spouse who is receiving care. All these statistics show that many people aren't getting the most from their long term care insurance.   

Starting Your Elimination Period ASAP

You must fully understand your long term care insurance policy's elimination period in order to make sure it starts as soon as possible. Otherwise, you will end up paying more out-of-pocket for your care. In some cases, the day the elimination period starts might be the day your claim is approved. This is why filing your claim as soon as possible is important in reducing the financial burden of your long term care. 

It is very important to read and understand the language in your long term care insurance policy. In some cases, the elimination period doesn't start until your claim is approved AND you are receiving services. Policies may also give credit for longer time periods if a certain number of days of care have been provided. 

Lastly, there are some policies that don't have an elimination period. These would generally be more costly, but it is possible to get long term care without having to pay for the initial care out of pocket. 

Why Understanding Your Long Term Care Insurance Matters

Seeking out a caregiver when you need long term care is difficult enough without dealing with insurance companies, but these policies are also a lifesaver for people who would otherwise not be able to afford care. That is why it is important to fully understand your insurance, so you can make the best of it. 

Making the best of your insurance policy means knowing how much savings you need to handle long term care needs outside the benefits of your policy. It means understanding if you need to immediately file a claim to cut down costs, or if you can rest easy knowing you don't have an elimination period. 

The last thing you want to do is start learning about your insurance benefits while you are in the midst of seeking care. Preparation ensures that your long term care will not be a financial burden to you or your family.