As the cost of long-term care continues to climb across the country, it becomes increasingly important to include long-term care planning in your overall estate plan. For many individuals, that means looking into long-term care insurance as a potential safety net. Because not all insurance policies are created equal, it is crucial to learn how to assess the quality and suitability of a policy before making a commitment. With that in mind, a Murfreesboro Medicaid planning attorney at Bennett | Michael | Hornsby offers some guidance to help you decide if long-term care insurance is the right choice for your circumstances.
What Is Long-Term Care Insurance?
Long-term care insurance, or LTCI, is designed to help pay for care when someone can no longer manage daily activities without help. This may be the result of aging, a serious illness, an accident, or the onset of cognitive decline such as dementia. A policy might cover a wide range of support services, including assistance with basic tasks like dressing and eating, as well as more complex care provided by licensed healthcare professionals. The purpose of LTCI is to lessen the financial strain associated with these services, which are often not covered by traditional health insurance or Medicare. Depending on the policy, benefits may apply to care provided in a nursing home, an assisted living community, or even your own home.
What Should You Look for in a Long-Term Care Insurance Policy?
Evaluating long-term care insurance requires careful consideration of multiple policy features. You will want to make sure the policy is both practical and sustainable over the long term. Factors to consider when evaluating an LTCI plan include:
- Range of Care: Start by reviewing the range of care settings that the policy covers because some policies are more restrictive than others. You will want to determine whether care provided at home, in an assisted living facility, or in a nursing home would be eligible for benefits. It is also essential to check whether different levels of care, such as custodial care or skilled nursing services, are included.
- Benefit Trigger: The “benefit trigger” refers to the specific conditions that must be met before the insurance company begins to pay for care. Most policies require the inability to perform a minimum number of activities of daily living, such as bathing or feeding oneself, or the presence of a qualifying cognitive disorder. Be sure to understand exactly what criteria must be met to qualify for benefits.
- Maximum Benefits: You will also want to look at the benefit amount and how long coverage will last. A policy may provide a fixed daily or monthly payout and include a cap on the number of years benefits will be paid. Since care costs in Tennessee are likely to rise over time, it is wise to compare these benefit levels to current and projected expenses in your area. Also, examine whether the policy includes inflation protection. Some policies increase benefits automatically to account for rising costs, which can make a substantial difference over time.
- Elimination Period: The elimination period refers to the number of days you must wait before benefits begin, and you are typically responsible for costs during this time. A shorter waiting period usually means a higher premium. Balancing cost and coverage are key.
- Premiums Structure: You should carefully review how the premiums are structured because some policies offer level premiums that do not change, while others allow for increases in the future. Buying coverage earlier in life often results in lower premiums, but this means you could be paying into the policy for many years before using it. Make sure the policy remains affordable as your financial situation evolves.
- Providers: If the policy includes a provider network, make sure there are enough reputable and qualified providers located in Tennessee. Some policies restrict you to using network providers, while others offer more flexibility in selecting your care team. Ensuring access to quality care in your preferred location is essential.
- Optional Features and Riders: Some policies allow you to customize coverage through optional features or riders. Shared benefits for married couples, extra home care coverage, or international benefits may appeal to some consumers. Be sure to understand what each add-on offers and determine whether it is worth the additional cost.
- Strength and Reputation of Insurance Company: Evaluate the financial strength and track record of the insurance company offering the policy. Because long-term care insurance is a long-term investment, it is important to choose a company with strong ratings and a reliable history in the marketplace. Look for ratings from agencies like A.M. Best or Moody’s to gauge the company’s ability to meet future obligations.
- Exclusions and Limitations: Policies often exclude coverage for pre-existing conditions, some mental health disorders, self-inflicted injuries, or care that is not considered medically necessary. Reading through these exclusions in detail will help you avoid confusion and disappointment later.
Contact a Murfreesboro Medicaid Planning Attorney
If you have additional questions or concerns about whether a long-term care insurance policy is right for your Tennessee estate plan, contact an experienced Murfreesboro Medicaid planning attorney at Bennett | Michael | Hornsby as soon as possible. Contact the team today by calling 615-898-1560 to schedule your free appointment.
- Is Long-Term Care Insurance Right for Me? - May 15, 2025
- When Is DUI a Felony in Tennessee? - May 1, 2025
- How a QTIP or QDOT Trust Might Fit into Your Tennessee Estate Plan - April 18, 2025
