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There are many advantages to buying a long term care insurance
policy, but as with any insurance product, you need to take the
"buyer beware" attitude.
These suggestions will help you avoid some of the mistakes
people make when reviewing the details of a LTC insurance
policy.
#1 Mistake - Failing to get a comparison.
The long term care insurance market is not what it used to be 25
years ago when there were only a handful of companies selling
the product. Today, there are dozens of companies, each
offering several different products to the consumer.
What to Do: Get a comparison quote and have a long
term care insurance specialist explain the differences in
benefits and premiums between them. Avoid buying benefits
you don't need.
#2 Mistake - "Cheap" Premiums
Many companies just entering the long term care insurance market
may offer a cheaper policy to attract buyers. While the
company may not be a bad company, be cautious as this may be a
sign of increased premiums later on.
What to Do: Research the company's experience in
the market and their history of rate increases. (Some may
even offer rate guarantees.) Check the company's rating
(see rating page) and avoid buying a policy just because it's
the "cheapest".
#3 Mistake - Type of Care Covered
A policy may offer coverage for care in a long term care
facility, but not for home health care. Also, the policy's
definition of "facility" is extremely important. A
comprehensive policy will typically cover most types of care.
What to Do: Review the "Outline of Coverage" with a
long term care insurance specialist to determine how the
insurance company defines "facility" and what type of care is
covered.
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