Even Insured Folks Have Out-of-pocket Expenses

By Author: Cynthia Clarke
Total Articles: 18
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Do not get the illusion that people with long term care insurance (LTCI) do not have to spend a single dollar for their long term care (LTC). This insurance product can protect your nest egg and grant you instant access to quality LTC services but you will still have some out-of-pocket expenses as required by your long term care elimination period.

Each LTCI policy has an elimination period which takes effect after the policyholder has met a benefit trigger and after he has received 90 days of care that will prove that he is incapable of performing two or more activities of daily living (ADL).

The elimination period, which is also known as the waiting period, is the number of days in which you have to use your own money to pay for the cost of LTC services that you would acquire.

Insurance companies that market LTCI policies give their clients absolute freedom to select their elimination period because the latter’s choice will affect their premium and finances. Policy buyers can choose a 30-day waiting period or go for 60 days, 90 days, 180 days, or one year. The shorter one’s ...
... elimination period is, the higher is his annual premium. Meanwhile, the longer it is, the lower shall his premium be.

Perhaps you’re thinking if everybody just chooses a long waiting period, like one year, then nobody will have to worry about how to maintain the premium of his coverage. Unfortunately, it is not that easy because not everybody has a substantial amount of money in the bank. If an individual has a modest income and his total assets are not enough to cover the annual cost of a private nursing home room, he should weigh his options carefully.

If you choose your policy’s elimination period in haste you could wind up with either huge out-of-pocket expenses or a very high annual premium.

How to Choose Your Long Term Care Elimination Period

In choosing the waiting period of your LTCI policy you simply have to consider the same factors that you considered for your maximum benefit amount and coverage period – the level of care that you will need and the cost of care in your area.

If you have about $80,000 in the bank and you are anticipating in-home care which is currently priced at $152 in your area, it will be reasonable to choose a 90-day waiting period. On the other hand, if your family has a history in stroke and you are likely to require some level of nursing home care avoid a very long waiting period or you might run short on funds.

The average daily cost of a private room in a nursing home, according to Genworth Financial’s just released 2012 Cost of Care Survey, has increased from $213 to $222. If you will choose an elimination period of one year just to save on the premium of your coverage, you will end up spending a total of $81,030 at the end of the year.

Keep in mind that you will not be able to receive your insurance benefits until you’ve accomplished your long term care elimination period so do not take this aspect of your policy for granted. If you have questions, don’t hesitate to seek advice from your LTCI adviser.

Visit CompleteLongTermCare.com now for free long term care quote plus information about long term care insurance costs.