Traditional Long Term Care Insurance
Traditional long term care insurance is standalone coverage designed to pay for qualifying extended care, with benefit periods, daily or monthly limits, elimination periods, inflation protection, and the possibility of premium increases to weigh.
Standalone Coverage for Extended Care
Traditional long term care insurance is a dedicated policy whose sole purpose is to pay for qualifying long term care services. Unlike hybrid products, it carries no life insurance death benefit, which keeps its premium lower but means there is no return of premium if the care is never needed.
The policy pays a daily or monthly benefit, for a defined benefit period, after an elimination period is satisfied, when the insured meets the benefit triggers defined in the contract.
Benefit Periods and Limits
The benefit period defines how long benefits are paid, commonly two, three, five years, or a lifetime. The daily or monthly benefit limit defines how much is paid per period. Together they set the total pool of benefits available.
Choosing a longer benefit period and higher daily limit increases the premium but provides more protection. We help you match these choices to the kind of care you would want and the resources you have.
Elimination Periods and Inflation Protection
The elimination period is the waiting time between when care begins and when benefits start, similar to a deductible. Longer elimination periods lower the premium but require you to pay for more care out of pocket first.
Inflation protection is a feature that increases the benefit over time to keep pace with rising care costs. It is one of the most important features of a traditional policy, because without it, a benefit adequate today may fall short decades from now.
Premium Increases
Traditional long term care insurance premiums may increase over time. Rate increases are subject to applicable regulation and policy terms, and are typically approved for a class of policyholders rather than individuals, but they are a real risk to plan for.
This is the central tradeoff of traditional coverage: lower initial cost in exchange for the possibility that premiums could rise. We help you understand this tradeoff and consider whether traditional or hybrid coverage better fits your tolerance for that risk.
Our Approach
We model the benefit period, daily limit, elimination period, and inflation protection against the cost of care in the Los Angeles area and your resources. The goal is a policy that will actually meet the need if it arises, without promising more than the contract delivers.