There are Only Five Basic Elements a Consumer Needs to Know About Long Term Care Insurance Policy Design

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There are only five basic elements to understand when you consider the purchase of a long term care insurance policy. These elements will help consumers design a policy that provides meaningful protection, whether they need care and make a claim soon after purchase or decades in the future.

There are only five basic elements to understand when you consider the purchase of a long term care insurance policy. These elements will help consumers design a policy that provides meaningful protection, whether they need care and make a claim soon after purchase or decades in the future.

#1 Daily Benefit

The daily benefit is the limit that the policy will guarantee to pay you for covered services once your claim is approved. Most insurance companies define the value of a LTC insurance policy by multiplying the daily facility benefit by the number of days in the benefit period. A policy with a $200 daily facility benefit, and a three-year benefit period (3 years x 365 days = 1,095 days), is worth $200 x 1,095, or $219,000. This is often called the pool of money.

#2 Inflation Protection

Today's cost of care is only a benchmark, because the cost of care will inevitably increase. Purchasing a policy with inflation protection is, therefore, very important. Baby boomers may not make a claim against their LTC insurance benefits for 30 years. Five percent compound inflation protection is the best inflation protection available, and is highly recommended. A policyholder must self-insure (pay for) any shortfall between an insurance policy’s benefit and the actual care cost.

#3 Elimination Period

The elimination period is similar to a deductible; it's the number of days before the policy starts paying a benefit.

#4 Benefit Period

The benefit period is the number of years that the policy will pay, once the elimination period has been satisfied.

#5 Return of Premium

What happens when LTC insurance premiums are paid for years, and a policy is never used? You can purchase a policy with a return of premium provision. Return of premium terms vary among contracts. A traditional return of premium rider refunds, at death, total premiums less claims, and some return premium regardless of claims. Knowing that premium payments can be refunded is reassuring to many consumers.

The purchase of LTC insurance involves buying a pool of money to pay for long term care. Don't get distracted. Focus on the five decisions above to design a policy that meets your needs and circumstances. For more information go to http://www.securityadvantageltc.com.

Republic Marketing Group, Inc., of New Braunfels, TX, is the national marketing organization for Security Advantage™ long term care insurance. This policy has two valuable riders. The Maximum Lifetime Benefit Accelerated Rider (called the "Acceleration Rider") offers younger claimants, with less-than-lifetime benefit periods, immediate access to the inflation-adjusted amount of money the policy would be worth at age 85. The Return of Premium Rider gives policyholders the choice to either: cancel the policy before age 75, and receive premium dollars, net of any claims paid, back; or keep the policy, adding their premiums paid to their benefit pool.

Agents may get more information on Security Advantage™ Long Term Care Insurance by calling 20+ year LTCI industry veterans Ron Hagelman (830-620-4066) and Barry Fisher (818-489-1839). Product is not available in all states. Limitations and exclusions apply. Underwritten by Loyal American Life Insurance Company®.

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Ron Hagelman

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