There are different types Long Term Care Insurance Policies. “Indemnity” or “Expense Incurred” policies are most common. When you buy an expense incurred policy, you choose the benefit amount. Regardless of what you spend an “indemnity” or “per diem” policy pays up to a fixed benefit amount. An “indemnity” or “per diem” policy reimburses for the actual expenses for services received up to a fixed dollar amount per day, week, or month.

“Integrated Policies” or policies with “Pooled Benefits” pay a total dollar amount which may be used for different kinds of long term care services used. There is usually a daily, weekly, or monthly dollar limit for long term care expenses covered by this kind of policy. For example you buy a policy with a maximum benefit amount of $300,000 of pooled benefits. You will have, with this policy a maximum daily benefit of $300 that would last for 1,000 days if you spend the maximum daily amount on care. If your care costs less than the maximum daily amount of $300 you will receive benefits for more than 1,000 days.

According to where benefits are paid Long Care Insurance Policies are divided into three broad categories – Home Care Only, Nursing Home and Residential Care Facility Only and Comprehensive. Home Care Only policies cover care in your own home or a community setting. It does not cover care in Assisted Living Facilities or Nursing Homes. It includes benefits for home health, adult day health care, hospice, respite care, personal care and homemaker services.

Nursing Home and Residential Care Facility Only policies cover care in a nursing home or any place that provides assisted living care as long as this place is licensed as a Residential Care Facility for the Elderly (RCFE). The benefit of this kind of policy is not the payment for room and board in these facilities. The policy benefits include coverage of all long term care services you receive in either of these facilities up to the policy’s maximum daily benefit amount.

Some of the RCFE include small neighborhood homes also called board and care facilities, retirement homes and specialized community facilities for patients with cognitive impairment (dementia) from Alzheimer. In this kind of policy, the assisted living benefits must equal to at least 70% of the nursing home care benefit.

Comprehensive Long Term Care Insurance Policies provide coverarge for costs rising out of care in a nursing home, assisted living facility, home care and community care (adult day care). Different companies require different criteria to be met before benefits can be paid by LTC Comprehensive policies. Comprehensive Long Term Care Insurance Policy will pay you benefits when two activities of daily living (such as bathing, using the bathroom, dressing eating etc.) can not be performed or you have a cognitive condition that requires supervision. The criteria required for the benefits remains same whether care is provided at your own home, in a nursing home, or in an assisted living facility.

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Your Long Term Care Insurance Policy Premiums are influenced by the type of policy chosen, daily benefit amount to be paid, your age, number of years the policy will pay benefits, choice of inflation protection and the number of days after you qualify for the benefits before the company will start to pay benefits. Few companies will insure you for a higher premium if you have a pre-existing condition. Your LTCI policy premium is influenced by the combination of all the above factors.

The costs of benefits you choose are calculated differently by different LTCI companies. The significant difference you see between premiums for similar benefits is the result of the above. To illustrate the above, a company may calculate the premium based on every $10 of the daily benefit you choose. If the company charged $95 for each $10 of daily benefit, the premium would be $950 per year for a daily benefit of $100. If the cost was $150 for a similar package of benefits, the annual premium would rise to $1,500 with another company.

Your LTCI premium is affected by the method and amount of inflation protection chosen. This nearly doubles the cost for those in their 40s and 50s not expecting to need care for several years. With age your probability of developing health conditions which make you ineligible to apply for new benefits increases but your ability to change LTCI policy diminishes as you age.

Over the years your LTCI premiums can increase. At the time of buying a LTCI policy your agent provides you with a personal worksheet which explains the rate increases the company has had since 1990. The California Department of Insurance website lists the rate increases for every company that sells LTCI. Increasing future premiums became difficult for LTCI companies when California passed legislation in 2000.

It became mandatory in 2006 for companies filing for premium increases over a certain amount to offer their policy holders the choice of stop paying their premium and keep the benefits equal to the total amount of premiums already paid. Only a small amount of care will be financed by the total amount of premiums you have already paid. You will not lose all your benefits just because of a premium increase you were unable to pay.

Lower premiums can be negotiated with your company by reducing some of your policy benefits. If you need to lower your premium or you have received a premium increase notice contact your local Health Insurance Counseling and Advocacy Program (HICAP) office.

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Long Term Care Insurance pays for costs rising out of long term care services. Long Term Care is help which is needed to carry out daily activities like eating, bathing, dressing, using the bathroom etc. when you have a physical disability or cognitive impairment such as dementia caused by Alzheimer’s disease. It pays for care not covered by traditional health insurance, Medicare or Medicaid. It is care not intended to cure you nor is it received in a hospital. It can be received in your own home, a nursing home or assisted living facilities and it is care which you may need for the rest of your life.

Health services for those who are 65 or older is provided by Medicare which is a Federal Health Insurance program. Those who are under 65 but have certain disabilities, and those dealing with end stage renal disease requiring dialysis or a transplant are also covered by Medicare. Those suffering from ALS or Lou Gehrig’s disease are also eligible for Medicare. Only specific short term skilled care such as inpatient hospital stays, inpatient skilled nursing facility stays, hospice care and home health care are paid by Medicare. It also pays for some out patient medical services such as doctor visits, diagnostic tests, preventive care and prescription drugs. For a limited time only specialized care in a hospital is provided by Medicare.

A state based program supplemented by Federal Funds is called Medicaid. Medi-Cal is the Medicaid Program in California. According to your state’s guidelines Medicaid aims to provide health care services to people with low-income and asset levels. You must meet your state’s poverty criteria in order to be eligible for Medicaid. It generally means you need to expend all but $2000 of your assets. A welfare program kicking in only after a person’s assets are gone is Medicaid!

Medigap is a form of private supplemental health insurance policy which increases the amount of health insurance for eligible Medicare recipients. Medigap is provided by private health insurance companies such as Humana, Blue Cross and Blue Shield etc. The 12 standardized Medigap Policies have the same benefits regardless of which private company sells it to you. A part or all of Medicare’s coinsurance and deductibles are paid by Medigap policies. A few Medigap policies cover health care costs which are not covered by Medicare like emergency medical care in foreign countries.

In summary, Long Term Care costs are covered only by Long Term Care Insurance. To protect your assets and to safe guard yourself and your family in the event you need long term care, seek Long Term Care Insurance.

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Between 1946 and 1964 children born in the US are known as the Baby Boom Generation. 28% of the population is represented by the 76 million baby boomers. 40% of this generation will celebrate their 90 birthday. Some kind of Long Term Care Services at some point in their lives will be needed by 70% of people over the age of 65.

This generation will make the elderly population double what it is today when they reach retirement in 2030. This year 2010, the oldest baby boomer turns 65, the youngest by 2030. By 2050 the youngest baby boomer turns 85 when the need for long term care is felt the most. 30% of Baby Boomers think that they have long term care coverage. Sadly, those who can afford to purchase a policy have not done so yet.

A big portion of seniors needing long term care in the future consists of baby boomers not planning for this need today which will lead to financial drain on the government. 43% of nursing home care costs for seniors come from Medicaid. In the future Medicare and Medicaid will be taking more out of the system when fewer workers in the workforce will be contributing (tax).

Today’s life style has made informal home care a less of an option for the baby boom generation than it was for their parents. Demographic changes like smaller family size, work related mobility, increase in divorce rates and increase in people choosing to remain single have made informal home care more difficult.

The baby boom generation needs to realize the possibility of needing some kind of long term care at some point in their life. Long term care should become a key component of retirement planning to ensure financial peace of mind in old age. Admitting that “this can happen to me” and buying a long term care insurance policy at an earlier age will be cheaper than later. Not expecting the government or family to meet your long term care needs will help you choose a policy that best fits you. For financial freedom and peace of mind choose a long term care insurance policy with the maximum coverage.

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People with chronic illness or disabilities use Long Term Care services. It can be defined as help needed with daily activities such as eating, bathing, using the bathroom, dressing, moving from bed to chair etc. This kind of help is not skilled care and Medicare only pays for skilled care. Help received in your own home, in a nursing home or in an assisted living centre is not paid by Medicare. Only after a person’s assets are gone does Medicaid kick in.

Expenses arising out of long term care can be met with Long Term Care Insurance. With increasing life expectancy the need for help with daily activities also increases. By 2030 the last of the Baby Boomers reach 65 and 40% of them will live to be 90. At some point in their lives 70% of people over the age of 65 will require help with their daily living. Injuries and accidents can happen to anybody at anytime forcing one to rely on these services.

A shocking 40% of people receiving help with daily activities are working age adults between 18 and 64. Long term care insurance bought at an early age locks in rates which can not be found at a later age. This kind of insurance can not be bought at a time of crisis or only at the time you need it.

Many a time children or family would want to help. But most always children will have their young family to take care of or can not quit their jobs to help care for their parents. The financial freedom to choose the kind of services you want and where you want to receive it comes with maximum coverage long term care insurance.

Everyone hopes to leave their life savings to their loved ones and not spend it on hospital and home care bills. You can protect your savings and assests with long term care health insurance and if you recover and over come the need for help with daily activities you will still have your savings to enjoy.

Want to find out more about Long Term Care Insurance, then visit Maria Smith’s site on how to choose the best Long Term Care Health Insurance for your needs.

Begin by reviewing your current financial condition, your savings and assets, and consider the kind of Long Term Care you want before you buy long term care insurance policy. Look for a financially sound Long Term Care Insurance Company with a good rating so that the company is still around when you want to receive your benefits say in 20 years. Read the long term care insurance reviews and claims process and know how many filed claims have been paid by the company.

Your state of residence and the cost of long term care services in your area influence your long term care insurance quotes. Seek a Long Term Care Insurance policy that factors in the inflation rate. Find a policy that provides the maximum daily coverage and has non-cancel and guaranteed renewable features. You want to make sure that your policy is there for you when you need it the most. A nursing home care for a day that costs you $140 today will cost approximately $260 in 15 years at 5% inflation rate. You may be left with too little money too late if inflation is overlooked when buying your Long Term Care Insurance policy.

Become familiar with non-cancel and guaranteed renewable Long Term Care Insurance policies so that your policy is not canceled just when you need it the most. A Long Term Care Insurance policy which provides coverage if you become unemployed and works along with your Social Security is preferred.

Consider a Long Term Care Insurance policy with coverage when unemployed, works with your Social Security and comes with non-cancel and guaranteed renewable features. Some Long Term Care Insurance policies have an option to choose a 10 year or paid up by age 65 payment plan and the freedom to choose the benefit payout – either reimbursement or indemnity. Long Term Care Insurance policies allows you to apply for additional coverage without providing proof of medical insurability once a year for a specified number of years. Look into Long Term Care Insurance policies which allow you to receive benefits if you experience an income loss from a partial or a total disability.

A Long Term Care Insurance policy with the maximum coverage gives you the financial independence and dignity when you have the option of being able to go where you want to go instead of going where you are taken. Long Term Care Insurance policies with fixed premiums and stay in force as long as you pay the premiums not only protect your assets but should you overcome the need of long term care, you still have your savings to enjoy when you recover.

Maria Smith likes to write about general insurance and long term care insurance.