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MetraFinancial
Group
6713 West Florissant
St. Louis, MO 63136
314.382.7599
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Should I buy long-term care insurance?
- Four key reasons to buy long-term care insurance
1. Preserve your assets for your family instead of
spending the money on long-term care.
2. The odds are one-in-three that a man over 65 will
need long-term care; for a woman over 65, the odds
are one in two.
3. New rules make it hard to qualify for Medicaid.
4. Premiums may be partially tax-deductible
- Typical policy features
The best policies pay for care in a nursing home, assisted
living facility or at home. Benefits are typically expressed
in daily amounts, with a lifetime maximum. Some policies
pay half as much per day for at-home care as for nursing
home care. Others pay the same amount, or have a "pool
of benefits" that can be tapped as needed.
- Elgibility triggers
Make sure you know when benefits kick in. The policy
should state the various conditions that must be met.
1. The inability to perform two or three specific "activities
of daily living" without help. These include bathing,
dressing, eating, toileting and "transferring" or being
able to move from place to place or between bed and
chair.
2. Cognitive impairment. Most policies cover stroke,
Alzheimer’s and Parkinson's disease, but other forms
of mental incapacity may be excluded.
3. Medical necessity, or certification by a doctor
that long-term care is necessary.
4. Prior hospitalization. Some older policies require
a hospital stay of at least three days before benefits
can be paid. This requirement is very restrictive and
should be avoided.
5. A benefit period that may range from two years to
lifetime. You can keep premiums down by electing coverage
for three to four years -- longer than the average
nursing home stay -- instead of lifetime.
6. A waiting or "elimination" period. Premiums will
be lower if you pay for an initial period of care yourself
instead of electing first-day coverage.
7. Inflation protection is an important feature, especially
if you are under 65 when you buy benefits that you
may not use for 20 years or more. The best inflation
provision compounds benefits at 5% a year.
8. Guaranteed renewable policies must be renewed by
the insurance company, although premiums can go up
if they are increased for an entire class of policyholders.
9. Waiver of premium, so that no further premiums are
due once you start to receive benefits.
10. Third-party notification, so that a relative, friend
or professional adviser will be notified if the policyholder
forgets to pay a premium.
- Optional Features
1. Restoration of benefits. This feature ensures that
maximum benefits are put back in place if you receive
benefits for a time, then recover, and go for a specified
period (typically six months) without benefits.
2. Nonforfeiture benefits return a portion of premiums
or keep a lesser amount of insurance in force if you
let the policy lapse. This provision, required by some
states, adds to the cost of the policy.
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