Riders for long term care (LTC) insurance provide certain advantages that help you manage the financing of care services more effectively. Moreover, riders are usually optional, which means that you can choose whether to include one rider or more to your LTC insurance policy or none at all. Naturally, these riders come at extra cost, but they are immensely useful with proper planning and the right circumstances.
LTC Insurance Riders to Consider
When you purchase LTC insurance, you might come across one that already includes riders. The difference with this particular policy is that it has a fixed price. If you prefer a wider range of choices, opt for the optional LTCI rider. Let’s take a look at the various options:
Cash Benefit Rider
The cash benefit rider is great if additional costs, like medication and home modification, become your concern. It does not work as reimbursement; in fact, this rider gives you some money in order to afford those expenses.
As a rule, you obtain the cash benefit on a day-to-day basis. Moreover, your coverage begins after one hour of receiving initial long term care, and you still get the money even if you do not use care services on that particular day. This means that care recipients may even use the money to pay the services of family caregivers who typically spend $6, 954 a year on out of pocket expenses related to LTC.
Just remember that a cash benefit rider can be worth 60% to 100% of a traditional reimbursement LTC insurance policy.
Waiver of Elimination Period Rider
Typically, during the elimination period, you pay LTC expenses on your own because you cannot obtain insurance payments. This type of rider—formally known as the waiter of elimination period rider for home health care—enables your LTC insurance policy to pay the coverage as soon as you receive care in your home.
Moreover, covered individuals receive coverage uninterrupted even if they transfer to a care facility. This is because policyholders with this rider get to receive their cash support sooner while at the same time get to have their elimination period for facility care counted down.
Elimination periods vary in duration, so it is advisable to seek expert advice on how to make the most out of a waiver of elimination period rider.
Shared Care Rider
This type applies to married couples and domestic partners. The shared care rider combines the couples’ LTC insurance policies for a bigger pool of money and longer benefit period. This is useful because you or your spouse can utilize insurance payments for longer than the supposed benefit period in an individual policy.
Another form of shared care rider has two payment pools, which allow you to tap – even use up – your spouse’s pool or vice versa. There is also a rider that involves a third pool of LTC insurance benefits.
Purchasing LTC Insurance Today
It is no secret that many individuals find LTC insurance policies too expensive. However, the sky-rocketing cost of care is an even bigger threat. Without proper coverage and enough planning, LTC expenses can easily overwhelm your lifetime savings.
The best course of action is to be informed before purchasing. This way, you get to have the benefit that perfectly fits your needs and your budget. Just choose the features that you think you will need because an overloaded may seem attractive at first, but it can quickly drain accounts.
Refer to this comprehensive guide to LTC insurance to get a better understanding of the different aspects of a policy.
Written by Samantha Stein who is online content manager for ALTCP.org