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MAKE YOUR NEXT STOP THE RENAISSANCE NEW YORK MIDTOWN HOTEL

Steps from Penn Station & Madison Square Garden • In the heart of the Garment District • Minutes away from Times Square • 348 luxurious guest rooms + 8 suites • Rock and Reilly’s Gastropub; home one of NYC’s largest rooftop bars • Experience groundbreaking ambient intelligence technology in our digitally enhanced corridors and Discovery Portal • A multi sensory guest experience like no other

RENAISSANCE NEW YORK MIDTOWN HOTEL 218 W 35TH ST New York, New York 10001 USA t: 212.239.0014 f: 212.239.0016

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A policy that covers a range of services, including in-home services, home modifications, adult day care, assisted living and nursing homes is a better option than a policy with more limited coverage.

Look closely at the coverage amounts and limits on each policy. Some long-term care insurance might cover different amounts for different services (nursing home care would be covered at a higher daily limit than in-home assistance with bathing and dressing, for example), while other policies might pay a single rate for any service regardless of its cost. In 2014, the majority of policyholders chose daily benefit amounts between $100 and $199, according to AALTCI. All policies limit the maximum amount of benefits (in dollar amount or length of time) that are covered.

The elimination period is also important. Kitces compares it to a deductible, noting that it refers to the number of days you have to pay for care out-of-pocket before benefits kick in. In 2014, more than 93 percent of policies had an elimination period between 90 and 100 days.

Insurance companies also consider “benefit triggers,” or conditions that must occur before you’re eligible for benefits. Depending on the policy, benefit triggers might include losing the ability to perform three or more activities of daily living, including bathing, dressing and eating on your own.

Cheaper policies often include more complicated benefit triggers or introduce other restrictions that make it harder to access long-term care, notes Pfau.

“A lower premium can be a red flag,” he says.

Slome also warns against purchasing too much long-term care insurance. About half of all long-term care claims are for one year or less; in other words, you’re unlikely to need (or use) coverage for a long period of time. Almost half of the policies purchased in 2014 had benefit periods of three years or less.

“It’s a big mistake to look at a Cadillac proposal for a policy that covers every possible risk over an extended benefit period,” Slome says. “You’ll get sticker shock from the price, feel overwhelmed and do nothing.

“Some coverage is always better than no coverage,” he adds.

Before purchasing a policy through an insurance company or broker, check to see if you’re eligible for other kinds of long-term care coverage. Some companies offer employer-sponsored plans that have individual policies at discounted rates; professional and service organizations might also offer long-term care insurance at group rates to members.

To help compare the coverage and premiums from different companies, Kitces suggests working with an insurance broker. Be sure to find a broker who sells policies from multiple companies to get the best options.

“Most companies offer similar commission structures so there’s no real incentive to push one product over another,” he says.

Look for companies with at least an A rating from Standard and Poor’s or Moody’s Investors Service (most long-term insurance companies also include their ratings on their marketing materials), which indicates their overall stability. Mutual of Omaha and Transamerica Life Insurance are among the long-term care insurance providers with A ratings.

“Lower-rated companies might shut
down or stop selling long-term care
insurance, and that can create more
challenges getting claims settled,” says
Kitces. “A company with an A rating is
more likely to still be there to pay your
When you purchase a policy, con-
tinue paying the premiums. Researchers
at the Center for Retirement Research
at Boston College found that more than
one-third of people with long-term care
insurance let their policies lapse, forfeit-
ing all of their benefits.

Weighing the pros and cons of long-term care insurance, comparing policies and budgeting for premiums can seem overwhelming. But compared with the stress of covering the cost of a long-term care event, the effort is worthwhile.