6 Tips for Long-Term-Care Shoppers

To keep from paying too much or being covered too little, you'll want to keep these hints in mind.

Video: Health Insurance Basics

Video: Health Insurance Basics

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If you think you might be a candidate for a long-term-care insurance policy, you've got homework ahead. These are some of the questions to keep in mind as you scale the learning curve:

Is LTC insurance right for our family? Lengthy care at home or in a nursing facility can cost hundreds of thousands of dollars—but possibly much less, and you might not need it at all. Ask yourself whether your projected savings can cover the expense and, if not, whether you can afford years or decades of annual premiums.

How do we find out about the choices? A licensed agent will walk you through offerings from different insurance carriers. Names of agents are available through state insurance departments, either online or by phone.

What determines the premium? The size of the benefit, obviously. But the age of the individual covered, how soon benefits start and how long they last, whether benefits stay the same or rise with inflation, and the amount of the lifetime cap on covered expenses are a few of the other variables that complicate LTC policies.

How can we cut the cost? If you can't afford much coverage, lower the premiums by opting for "short and fat"—a limited period with generous benefits. Or you may be able to get a lower rate through your employer or a professional association.

How do we check out an LTC insurer? Go to the websites of A. M. Best and other firms that rate financial soundness.

Who can give us straight advice? You might meet with a financial planner who doesn't sell LTC insurance and has no stake in the decision.