OK, this one is our fault. We work with Long-Term Care Insurance (LTCI) every day, for our clients. We are big believers in LTCI for everyone, as part of folks Advance Living Directive, whether they desire to age in place, at home, or plan to move to an assisted living or board and care in later life.
We have said to everyone who will listen to us, make sure you understand the policy – what it covers, what it does not. We have written about LTCI in many blog articles, all of which can be found here.
One of the critical components of a good LTCI policy is an inflation rider. In an earlier blog, we stressed folks should ask:
- The inflation factor — Does the benefit keep pace with inflation?
- Is there a guaranteed increase in benefits (either a specified percentage, say 5%, or tied to the Consumer Price Index) over time, or is the benefit fixed forever? This is definitely something you want to consider. $100 per day now, while you are healthy and 45, may not be nearly enough after 35 years of inflation.
So, when my wife bought a policy, we “made sure” it had such a rider. But, as she read the policy, cover to cover last night, in preparation for incorporating it into our trust, she discovered the inflation rider only applies to facilities care, not home care!
So, the point, of course, is read the fine print. Long-Term Care Insurance really is a very good thing. Buy it before you need it, or you won’t be able to buy it. When you buy, don’t do what we did. 😦 Assume nothing; check everything.
Best wishes, Bert