Live Long and Prosper?

Katt, Peter C.
December 1998
Journal of Financial Planning;Dec1998, Vol. 11 Issue 6, p24
Academic Journal
This article focuses on the long-term care (LTC) insurance, which covers some or all of the costs associated with nursing home care, home care or adult day care. Generally LTC insurance benefits are triggered when an insured is no longer able to perform two or three common activities of daily living or has a cognitive impairment or a medical necessity. The amount of benefit, the length of time it is paid, inflation protection and the waiting period are variables that each insured selects for themselves. The benefit amount of the LTC insurance is range between $100 and $300 a day. The benefit amount should be directly related to the cost for nursing home care in the areas where your clients intend to retire. The waiting period is zero days to one year. It offers a waiting period with the best percentage savings, which may not be the maximum waiting period. The inflation factor of the insurance is five percent. Some policies figure this as simple interest and others figure it as compound interest. The inflation protection increases the benefit from the first day of the policy, not from the first day that benefits are received. Simple interest inflation protection increases the policy cost by about 45 to 85 percent, depending on age.


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