Different Ways to Buy Long Term Care Insurance
Long term care insurancecan be purchased any number of ways. Since private insurance companies sell long term care insurance polices, you can buy an individual long term care insurance policy from an agent or through the mail. You can also obtain this coverage under a group insurance policy through your employer or an association membership. The federal government and several state governments offer long term care coverage to employees, retirees and their families though these programs are voluntary and premiums are paid by the participants. Long term care insurance is also frequently provided through Continuing Care Communities. You can also get long term care benefits through a life insurance policy.
Most long term care insurance is sold through individual insurance policies, and most sales are done, face-to- face, with insurance agents. But insurance companies also sell policies through the mail, over the Internet and by telephone. Individual policies vary from company to company. Even within a company, a variety of benefit packages may be available. Because so many variations are available, you need to shop around and not just buy the first product presented. Read our article on the various types of policies.
Policies from Your Employer
Your employer may offer a group long term care insurance plan or individual policies at a group discounted rate. Group products are becoming more popular since the passage of the federal Health Insurance Portability and Accountability Act (known as HIPAA). For the employer, premiums are deductible as a business expense.
One of the advantages for an active full-time employee of insuring through an employer-group plan is that you may not have to meet any health requirements, or medical screening may be relaxed. Many employers also let retirees, spouses, parents and parents-in-law apply for long term care coverage. Relatives must usually pass the company's medical screening to qualify for coverage and must pay the premium, but at the lower group rate.
Generally, insurance companies are required to let you keep coverage when your employment ends or your employer cancels the group plan. Then you either continue with the same coverage or convert it to another long term care policy, but your premiums and benefits may change – usually in the direction of more premiums and less benefits.
Before you buy an individual policy, check to see if you can obtain group long term care coverage, which will probably be less expensive and may offer options not available through an individual policy.
Federal and U.S. Postal Service employees and annuitants, members and retired members of the uniformed services, and qualified relatives are eligible to apply for long term care insurance coverage under the Federal Long Term Care Insurance Program. Private insurance companies underwrite the insurance and the federal government does not pay the premiums. You do. Group rates under this program may or may not be lower than individual rates and the benefits may also be different.
If you or a member of your family is a state or public employee or retiree, you may be able to buy long term care insurance through a state government program.
Many professional and other associations contract with insurance companies and agents to offer long term care insurance to their members. These are similar to individual long term care insurance polices and require medical underwriting. They usually offer a choice of benefit options and allow you to keep or convert your coverage if you leave the association, but be certain you can keep your coverage if you leave before you purchase an association-affiliated policy.
Policies Sponsored by Continuing Care Retirement Communities
Many Continuing Care Retirement Communities (CCRC) offer or require you to buy long term care insurance. A CCRC is a retirement complex that offers a broad range of services and levels of care. You must be a resident or on the waiting list of a CCRC and meet the insurance company's medical requirements to buy its long term care insurance policy.
Long Term Care Via Life Insurance
Some insurance companies let you use your life insurance death benefit to pay for long term care expenses such as home health care, assisted living or nursing home care. This is known as an accelerated death benefit. Often this is only available if your condition has been diagnosed as terminal. The company pays you the actual charges for care when you receive long term care services, but no more than a certain percent of the policy's death benefit per day or per month.