As a member of the Society of Senior Advisors, I recieve a monthly enewsletter called Senior Spirit with helpful articles. This month's Long-Term Care Strategies for Seniors discusses an option for paying family members who act as caregivers. The excerpt follows:
A common misunderstanding about long-term care insurance (LTCI) is that there is no compensation for informal - usually family - caregivers. It's true that LTCI policies based on reimbursement models don't pay for informal care. However, policies known as cash plans put you in the driver's seat.
Qualifying to buy a cash plan and the triggers to access benefits are the same as with any LTCI policy. You have to be healthy to be insurable, so buying sooner rather than later is wise. And you must require help with two of six activities of daily living (eating, bathing, dressing, toileting, transferring and continence). Or cognitive impairment alone can validate your claim.
Finally, an elimination period applies. This refers to the length of time you must pay for covered services before the insurance company will begin to pay benefits; think deductible.
Once all of the above is satisfied, the insurance company will begin sending you the entire monthly benefit of the cash policy. You can use it to pay family caregivers or to address any other care you need. You need not submit bills or show how you're using the money. Cash plans also pay for international coverage, but funds are paid in U.S. dollars.
LTCI brokerage manager Aaron Eisenach likes cash policies. â€œThey are the most flexible plans in the market, and in many ways, the most attractive,says Eisenach. But people tend to buy the reimbursement model, because the premium can be half that of a cash plan.
According to Eisenach, there are other LTCI products that give consumers a less expensive way to get cash to cover home care. Some carriers offer riders giving you the best of both worlds,he says. One offers the choice between the monthly maximum for home care supplied by a qualified provider OR 40 percent of your benefit as cash. Other insurers offer other iterations of this hybrid model.
At issue is planning. Never make a purchase decision based on a product brochure alone. Make sure you deal with an experienced LTCI planner, who will ask you how and where you want to receive long-term care and how much control you want, rather than just how much premium you can afford. And remember, some coverage is better than none.