A popular question among prospective residents of a lifecare retirement community is whether or not to maintain existing long-term care insurance. It is a great question because, after all, a lifecare contract works much like long-term care insurance in the sense that the community guarantees long-term care services, along with all other services and amenities, for a flat monthly rate. The thought process is: why continue paying for long-term care insurance after paying for a lifecare contract that essentially covers the same thing? Before making a decision there are several important steps to take.
First, be sure you clearly understand the scope of your policy. You should not make any decisions until you actually know what your policy covers, or does not cover. For instance, many policies that were issued more than about twenty years ago were pure “nursing home” policies. These policies will not cover any services provided at home or in an assisted living facility; only skilled nursing facilities. You also want to know if the policy is a reimbursement plan, whereby the insurance company reimburses up to the actual cost of services, or does policy pay a flat monthly amount once care services are received, regardless of the cost of such services? The second type of policy could actually be quite beneficial for a resident of a lifecare community.
After you understand your policy the next step is to find out exactly what services are covered under the lifecare contract offered by the retirement community. Suppose, for instance, that the contract only applies to services provided in the healthcare facility, but not to in-home care. In this case a long-term care insurance policy that covers in-home care could be useful.
Finally, if your policy is a reimbursement plan, be sure to consult with a representative of the retirement community to find out how much of your monthly service fee will be shown as long-term care services when you send a receipt for services to the insurance company. This will help determine the extent to which you can utilize your insurance coverage.
Regardless of everything described above keep in mind that if you ever move out of the retirement community due to unforeseen circumstances then maintaining coverage could prove to be a wise decision because you might move someplace that does not offer a lifecare contract.
Depending on what you find after taking the above recommended steps you may ultimately determine that a middle-of-the-road approach is best. Instead of dropping coverage that you have paid for over the years, you might consider calling the insurance company to see what options exist for trimming benefits, and thus the premium, without losing your coverage altogether.
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