At Advisor Insurance Brokers, we know that planning for the future can feel overwhelming, especially when it comes to long-term care. As one of the largest brokerage agencies specializing in long-term care, life insurance and senior health plans, we’re here to help you navigate your options. Long-term care insurance is one of the most important decisions you can make to ensure your financial security and peace of mind as you age. With so many policies to choose from, asking the right questions is key to finding a plan that fits your unique needs. Here are 10 questions we believe are essential to ask before purchasing long-term care insurance.
1. What Type of Care Does the Policy Cover?
Long-term care isn’t just about nursing homes, many individuals prefer to receive care in the comfort of their homes or in assisted living facilities. Some policies may limit the types of care covered, while others provide a more comprehensive range of services.
Key questions to ask:
∙ Does the policy cover in-home care, assisted living and nursing home care?
∙ Are there restrictions on the type of caregivers covered? (For example, does it only cover licensed professionals, or can family members be compensated as caregivers?)
∙ Does the policy pay for home modifications, such as wheelchair ramps or bathroom adjustments, to support aging in place?
∙ Are adult day care services or hospice care included?
Choosing a policy that provides flexible care options ensures you have control over where and how you receive care.
2. How Much Coverage Does the Policy Provide?
Long-term care costs vary depending on the type of care and location. Nursing home care can cost over $100,000 per year, while home healthcare services also come with significant expenses. Your policy’s benefit amount should be sufficient to cover these costs without requiring you to dip into savings.
Key questions to ask:
∙ What is the daily or monthly benefit amount?
∙ Is there a total benefit cap and if so, what is it?
∙ Does the policy include inflation protection and at what rate?
∙ Are there different coverage levels for various types of care (e.g.,, lower payouts for home care vs. full coverage for nursing homes)?
Inflation protection is particularly important because healthcare costs rise over time. Without it, your policy might not provide adequate coverage in the future.
3. What Are the Policy’s Benefit Triggers?
Long-term care insurance benefits don’t kick in immediately. Most policies require policyholders to meet specific criteria before they start receiving benefits. These benefit triggers determine when you qualify for payouts.
Key questions to ask:
∙ How many Activities of Daily Living (ADLs) must be impaired before benefits begin?
∙ Which ADLs are considered (bathing, dressing, eating, toileting, transferring, etc.)?
∙ Does the policy cover cognitive impairments such as Alzheimer’s or dementia?
∙ What medical certification is required to trigger benefits?
Most policies require the inability to perform at least two or three ADLs before benefits begin, but policies differ in their definitions. If cognitive impairments like dementia run in your family, choosing a policy that explicitly covers such conditions is vital.
4. What Is the Elimination Period?
The elimination period is the waiting time before benefits begin, similar to a deductible in health insurance. During this period, you must cover care expenses out of pocket. Shorter elimination periods mean quicker access to benefits but often come with higher premiums.
Key questions to ask:
∙ How long is the elimination period? (Common options are 30, 60, 90 or 180 days.)
∙ Can I afford care during the waiting period?
∙ Does the elimination period reset if care is needed again later?
If you have sufficient savings or other financial resources, a longer elimination period might be more cost-effective, as it typically lowers the policy’s premium.
5. Is the Policy Tax-Qualified?
Some long-term care insurance policies are tax-qualified, meaning you may be eligible for deductions on your tax return. Understanding the tax benefits of your policy can help you maximize savings.
Key questions to ask:
∙ Is this policy tax-qualified under federal law?
∙ How much of my premiums can I deduct?
∙ Are my long-term care benefits taxable?
Tax-qualified policies meet specific IRS criteria and allow deductions of premiums based on age and medical expenses. Consulting a financial advisor can help you understand the potential tax benefits of your policy.
6. Does the Policy Offer Shared Benefits for Couples?
If you’re married, shared benefit riders allow spouses to share coverage. This is a great option if one spouse needs extensive care while the other requires minimal assistance.
Key questions to ask:
∙ Is a shared care rider available for couples?
∙ How does sharing benefits impact overall coverage?
∙ What happens if one spouse uses all their benefits?
A shared benefit policy can provide flexibility while potentially reducing overall costs compared to purchasing two separate policies.
7. How Does the Policy Handle Pre-Existing Conditions?
Pre-existing health conditions can impact eligibility and coverage. Some insurers may impose waiting periods or deny coverage altogether for certain conditions.
Key questions to ask:
∙ How do pre-existing conditions impact my eligibility?
∙ Is there a waiting period for pre-existing conditions?
∙ What medical underwriting is required?
If you have existing health concerns, applying for LTCI sooner rather than later can prevent denial or increased premiums.
8. What Are the Policy’s Exclusions and Limitations?
Every policy has exclusions, services or conditions that are not covered. Understanding these limitations can prevent unexpected out-of-pocket expenses.
Key questions to ask:
∙ Are there specific illnesses or conditions excluded?
∙ Are there restrictions on where care can be received?
∙ Does the policy cover alternative treatments like acupuncture or holistic care?
Exclusions vary, so it’s important to read the fine print to avoid surprises.
9. Can the Premiums Increase Over Time?
Long-term care insurance premiums can rise over time, making affordability a concern. Some policyholders have experienced substantial rate increases after purchasing their policy.
Key questions to ask:
∙ Is this policy subject to rate increases?
∙ How have premiums changed historically for this provider?
∙ Are there ways to adjust coverage to manage premium costs?
Choosing a policy with stable pricing or options to modify coverage can help manage costs over time.
10. What Happens If I Never Use My Policy?
One concern many people have is paying for a policy they may never use. Some policies address this issue by offering hybrid coverage options.
Key questions to ask:
∙ Does this policy offer a return of premium option?
∙ Are there hybrid or linked benefit policies that combine LTCI with life insurance or annuities?
∙ Can unused benefits be transferred to a spouse or heir?
Hybrid policies allow you to use the benefits for long-term care, and if you don’t need them, they can be passed down to beneficiaries.
Learn More About LTCI
Purchasing long-term care insurance is an important step in securing your financial future and protecting your assets. By asking these essential questions, you can ensure that your policy provides the right coverage, fits your budget and aligns with your long-term care needs.