To get the most bang for your buck, we recommend your policy include:

• "Level Premiums" - No companies guarantee they will never raise your rates. Some major companies have never raised their rates and some will guarantee no rate increases for up to 10 years. But all long-term care insurance companies currently reserve the right to raise their rates in your state on a class (not individual) basis. That means they can raise the rates on all policyholders with your policy form, if your state insurance department approves the increase.
• Skilled nursing care (which is prescribed by a doctor and provided by skilled medical personnel) and custodial care (which can be provided by people without professional skills) in a nursing home, or at home, without any restrictions on previous care. This last point is important. You don't want a policy that requires, for example, your aging parent to be hospitalized before the insurer will cover nursing home stays, or prior skilled nursing-home care before they'll pay for custodial care.
• Assistance with as few as two "activities of daily living" (ADLs). These include needing help with bathing, dressing, eating, toileting, transferring, or because of incontinence. (Walking around is not an activity of daily living.)
• A daily benefit amount that's lower than the daily cost of nursing-home care in your or your parents' area. For instance, if the average nursing home costs $150/day, purchase a $125/day benefit and make up the $25/day difference yourself. You'll save $275 - $300/year in premiums.
• Inflation protection that automatically increases your initial benefit level annually at least 5%.
• A four- to six-year cumulative benefit period rather than lifetime benefits. This saves you $600 - $1,000 a year.
• A 90-day or more "elimination" period (which is the waiting period between when you enter a nursing home and when your benefits begin) shaves another $300 - $450 off your annual premiums.

Your total premium savings following our advice on these policies is a whopping $1,175 - $1,750 per year! You or your parents should invest these savings so you can use this money to offset the cost of the first 100 days of long-term care. In less than nine years of paying premiums, you'll have saved enough on premiums to offset any up-front costs.

Deciding on long-term care insurance can be very stressful. We know; we've been there ourselves. We hope our advice has you feeling more confident about your ability to make smart decisions for your parents, your spouse and yourself. Drop us a line and let us know how things are going, or if you have any questions.

Also be sure to check out our article, How to Cut Your Long-Term Care Costs.

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