Which Policy and Carrier is Right for You?

When you are shopping for long-term care insurance you will find that there are a lot of policies to choose from. Generally speaking, most policies include the same standard features. Most of the standard features that you will find in the policies that you look at are required by the National Association of Insurance Commissioners. In the next section, we will discuss the benefit choices you have.

Policies

Types of Policies
There are three main types of policies: Comprehensive, Nursing Home Only, and Home Care Only. Not all states and carriers offer all three. Some insurance carriers have eliminated Nursing Home Only and Home Care Only policies in favor of just offering Comprehensive policies, because many people wished that they had had greater flexibility once they qualified for long-term care benefits, but by then it was too late to make changes to the policy. Most long-term care insurance policies are reimbursement contracts where benefits are paid only for expenses that are incurred, up to a pre-determined benefit amount. Indemnity contracts pay the entire pre-determined benefit on a daily or monthly basis.

The following types of care are standard features found in most comprehensive long-term care insurance policies:

Nursing Home Facilities
Assisted Living Facilities (aka: Residential Care Facilities)
Home Health Care
Adult daycare
Respite care
Care coordination

Discounts Available
If you are in excellent health, or buying a policy as a married couple, discounts can cut your premiums from 10-30%. Carriers use different methods to determine who qualifies for a preferred rate. Spousal discounts are available as well. Some carriers will offer the discount to the insurable spouse, even if the other spouse is declined. Some carriers also offer discounts for multi-lives or employer-sponsored discounts.

Carriers

Not only should you be researching and picking a policy that best fits your needs, you should look at the carrier behind the policy. There are four major areas to look at when choosing a carrier.

1. Underwriting philosophy of the carrier:
   The best carriers are the ones that are responsible with the risk that they insure. If a carrier is insuring people that most carriers would decline, it is possible they would be more likely to have to raise rates in the future.
2. Pricing of LTC Policies:
   Beware of carriers that price their policies "below market price". In other words, their price is far less than the average the other major carriers are charging. If a carrier does this, it is possible that they will need rate increases in the future to pay their claims.
   
3. Experience in the LTC Insurance market:
   The best carriers are the ones that are often the largest, have the most policyholders, and have been selling long-term care insurance for a considerable period. These carriers are more likely to have a claim-paying track record.