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Long Term Care Insurance

There are many different types of long-term care insurance policies on the market. These policies cover a wide range of services including nursing home care, home health care, respite care, and adult day care.

Long-term care is very expensive. Medicare and Medicare Supplement Policies don't usually pay for long term care costs. That is why many people depend on the state Medicaid program, a long term care policy, or their own assets to pay for long-term care.

Long-term care policies might be a good option if you can afford the policy and have an adequate level of benefits. On the other hand, if you don't have significant assets to protect, long-term care insurance might not be in your best interest. When affording the premiums would cause financial difficulties, you should probably not purchase a long-term care policy.

If you decide to purchase a policy, determine what type of services you need and then find a policy that meets those needs. Before contacting an insurance agent or company ask yourself these questions:

  • How long of a stay in a facility will you need?
  • How much daily insurance benefit will be enough?
  • Can you afford the first day coverage or will you need an elimination period?
  • Do you want inflation protection? (state law requires agents and companies offer inflation protection)

Take your time and shop around for a policy that best meets your needs at a price you can afford. Like with any insurance policy, a good insurance agent will be patient and assist you with the process.

Your agent is also required to provide you with a shopper's guide to help you with your decisions. The Shopper's Guide to Long-Term Care Insurance provides a good overview of the long-term care industry and the choices involving long term care insurance.

If you do decide to purchase a policy, take time to understand the policy before you sign it. Make sure it provides the coverage you want. If you don't understand something, ask your agent, a family member, or a friend to clarify it.

The sale of long term care insurance is regulated by the South Dakota Division of Insurance. The Division has established some rules that carriers must meet when selling long-term care policies. These rules are designed to protect consumers and to ensure seniors are getting a quality product.

Some of these include:

  • Your agent must provide you with an outline of your coverage.
  • You have a 30 day period in which the policy may be returned for a full refund.
  • The insurance company may deny coverage for a pre-existing condition for no longer than six months.
  • A long-term care insurance policy may not exclude benefits on the basis of organic brain disease, including Alzheimer's or senile dementia.
  • Once issued, the policy may not be canceled, non renewed or otherwise terminated.

Other laws and protections do exist. For more information, to file an insurance complaint, or to obtain a shopper's guide, contact the South Dakota Division of Insurance at 605-773-3563.

Remember insurance possibilities other than what we've touched on in this section do exist. They include HMOs, employer health benefits, and indemnity policies.