Chelsey Tucker graduated with a Bachelor of History degree from Metropolitan State University in 2019. She now writes about insurance with her specialty being life insurance and has been quoted on Help Smart Phone and MEL Magazine.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years. He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Mar 19, 2020

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Questions To Ask When Buying Long Term Care Insurance

When buying long term care insurance, asking questions about what your policy covers is very important.

You will also want to find out how much you will pay in premiums and how the Internal Revenue Service treats your premiums and the benefits payable under the policy.

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A patient who needs long term care has become disabled as the result of illness or an injury. A long term care insurance policy is purchased to help pay for the cost of care provided to people who are unable to perform the activities of daily living on their own.

Activities of daily living include eating, bathing, using the washroom and getting in and out of bed or a chair. A person who has difficulty walking or with continence is also considered unable to perform the necessary activities of daily living.

What does the policy cover?

Before buying a long term care insurance policy, you will need to understand exactly what kinds of services your policy covers. It would be a mistake to assume that the policy only covers services being provided by a nursing home. When long term insurance policies were first introduced, this type of coverage was used to pay for services provided by a nursing home only.

Modern long term care insurance policies will pay a benefit that can be used to pay for nursing home care. It can also be used to pay for care provided in the policyholder’s home. Some policies will pay for hospice care for terminally ill patients.

No insurance policy will pay out benefits in every instance, and a person who wants to buy long term care coverage needs to review the terms and conditions carefully so that they understand what the policy exclusions are. Part of reviewing the policy document also involves understanding how and when benefits will be paid.

Many plans have a set waiting period before they will pay out benefits. During this time, the policyholder is responsible for paying the full cost of his or her care personally. The long term care insurance plan may pay a certain amount per day, or it may pay out at a set monthly rate.

The advantage to having a plan that pays out monthly is that the recipient has more flexibility in buying services. For example, if the policyholder is receiving some home care as well as getting help from family members, the benefits paid out by the insurance company can be used to pay for more hours of care provided by professionals without a loss in overall benefits.

To review, you will want to ask specifically:

  • Does this policy cover nursing home, in home care and hospice care?
  • What exclusions are part of this policy?
  • What time period or term is this policy written to cover?
  • How and when will benefits be paid?
  • Are benefits paid at a set daily rate or are expenses reimbursed?

In addition, you will want to ask about the cost of your policy. This will help you determine if you should invest in this coverage at your age, and this time of your life.

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What will the policy cost if I buy it today, or in 10 years?

Another important consideration when buying long term care insurance is how much the coverage is going to cost. The best age to purchase long term care coverage is not the same for everyone. The longer you wait to buy the insurance, the more it is likely to cost in premiums. The average customer for this kind of coverage is in their 50s, but people as young as 40 or in their 70s can also purchase this type of protection.

An applicant for long term care insurance coverage will have to go through the underwriting process before an insurance company will offer to extend coverage. The insurance company will want to get information about an applicant’s current health to get an idea of how likely it is that he or she will need to access long term care before setting rates.

One way to get lower rates on long term care coverage is to buy a policy with a longer waiting period before benefits are payable. This works in the same way that a policy deductible does, and if you are prepared to pay a higher level of the care yourself, you qualify for better rates.

How does the IRS affect my coverage?

How the IRS treats the benefits received under a long term care insurance policy is another question you should be asking before buying a policy. The benefits received are treated in the same manner as if they were from a life insurance policy, and are not taxable as income.

For individual taxpayers, a portion of the premiums paid may be tax deductible. Your insurance agent or financial planner can explain how the process works and whether you qualify.

Before buying long term care insurance, make a list of additional questions to ask the agent. He or she can explain your coverage options and different premium levels that are available. You will want to make sure you understand what you are paying for before you commit to buying it. Some policies have a lifetime limit on benefits payable, and this is an important consideration when you are considering long term care coverage.

Getting long term care insurance quotes is simple by entering your zip code into the tool box now!