Home Health Care Rider
The home health care rider pays for a licensed practitioner to administer long term care at the insured’s residents. There are typically three options:
- 100% of the daily benefit
- 80% of the daily benefit
- 50% of the daily benefit
Much of long term care is paid under the home health care benefit. Most policies have some home health care benefit. 100% is recommended.
The benefit period is the period of time the policy will continue to pay while the insured is receiving long term care.
This is the amount the policy will pay towards the insured’s long term care costs on a daily basis. The average cost for a private long term care facility in Utah was $165 per day in 2006.
The elimination period is the "waiting period" before benefits begin to be paid. Consider a short elimination period. In some policies, there is not much difference in cost between a short elimination period and a long elimination period, especially if the insured is relatively young.
Inflation Protection Rider
The inflation rider protects the insureds daily benefit against rising costs in the long term care market. There are three options:
Simple Inflation Rider: This rider will raise the benefit 5% each year and is calculated on the original daily benefit amount each year. This percentage does not compound. If the original benefit was $150 per month, the second year, it would be $157.50. The year after that, it would be $165.00.
Compound Inflation Rider: This rider will raise the benefit 5% each year and is calculated on the previous year’s daily benefit amount, each and every year. If the original benefit was $150 per month, the second year, it would be $157.50. The year after that, it would be $165.37
No Inflation Rider: With this option, the insured’s benefit stays the same while industry costs continue to rise. This could leave the insured with out of pocket costs if the time comes to use the benefits.
Health care costs are rising at an alarming rate, so it is extremely important that inflation protection be built in to the policy.
Waiver of Premium Rider
This rider allows the insured to stop paying the premium while benefits are being received. This can be of value to the insured, since they don’t have to worry about the monthly bill for the long term care insurance.