Cents and Sensibility
Cents and Sensibility
Each year, homes catch fire and most homeowners have insurance coverage. Each year, cars are destroyed in auto accidents and most car owners are covered. And each year, millions of people age 65 or over will have a long-term nursing-home stay, yet only a small fraction of these people are covered. Choosing long-term
care insuranceAs the population of older Americans increases, so does the need for nursing-home care. This type of insurance can be an inexpensive way to protect your life savings from the devastating costs of a lengthy nursing-home stay.
Long-term care insurance can help cover the cost of a nursing-home stay, home-care and other types of long-term care for as long as the patient needs them. When evaluating long-term care insurance, look for specific features.
>> Choose a long-term care insurance provider that is highly rated by respected rating agencies. Look for at least an A rating from A.M. Best and at least an A+ by Standard & Poor's and Duff & Pelps.
>> After you're accepted for coverage, your policy should pay benefits no matter what age you are when you file a claim.
>> Your policy should pay benefits no matter what level of care you receive, from short-term skilled nursing to long-term custodial care.
>> Look for policies that cover Parkinson's, Alzheimer's, and senility (no policy will cover these problems if they are pre-existing).
>> One you're covered, your premium should remain unchanged. Look out for companies that historically have raised rates for policyholders.
>> Be certain that the company has a solid track record of paying claims and providing timely services.
>> Many policies have low premiums and offer features that you may find attractive. A word of caution: You're buying a benefit that you may not receive for many years. Rate increases and inadequate service will quickly negate any benefit of a low initial premium.
Be sure to evaluate a number of policies from several reputable companies, and only buy insurance from someone you trust.
Guy Steele is a financial planner and head
of the Pali Palms office of Edward Jones. Send
planning and investing questions to him at 970
N. Kalaheo Ave., Suite C-210, Kailua, HI, 96734,
or by email at: gsteele2@pixi.com