A Genworth Financial Survey, conducted earlier this year showed that nursing home care was around $81,000 per year. Coupled with ever escalating home-care costs, Boomers are planning on purchasing insurance, to secure these expenses.
Many employers are appending long-term care insurance to their employee benefits packages, to entice experienced and high-value employees to stay on with the company and not flee for more lucrative pastures.
Since insurance is so vital an issue the question before the Boomers is, which insurance is the best, a long-term care plan through work or an individual policy? It all depends on what compromises you are willing to make between premium costs and coverage features and benefits.
First Option: Long-Term Employer Insurance
The foremost advantage of such an option would be that the premiums will be considerably lower. Employer plans usually have that added advantage. That is because the employer pays for the basic plan, whilst the employee only has to pay premiums on any chosen additional coverage.
The employee, opting for such a plan, may be required to pay between $500 and $600, whereas for a similar individual plan, he would probably end up paying $1000 or more each year.
However, this option has its down side too. You must continue to be in the employment of the company, if you are to avail of the insurance benefits. Discontinuance means that you will have to pay the premiums from your own pocket.
It's a multiple relationship between three partners - the employer, the insurer and you. What happens if the employer and insurers end their contracts? Your policy becomes worthless; if you cannot pay the remaining premiums from your own purse and don't forget your earning power will diminish as you grow older.
Option B: An Individual Policy
You don't buy a policy because it is cheap; you buy it because it provides you with the coverage you need or want. It does not make any sense to buy it otherwise.
Approach your independent insurance experts, they'll be very keen to sell you insurance, they will willingly go into all the details of the insurance policy. Find out everything, from the cost, the features, the duration of coverage and eligibility of home-care costs. Then evaluate what you have learnt, with what your employer is offering. The difference will be palpable and help you make the right decision.
Most experts advise buying individual insurance coverage, as it offers freedom, elasticity, portability and the option to take your insurer to court, if promises are belied or denied.
One last but crucial point, that is not to be overlooked. Which policy you opt for, depends on you and your circumstances and financial capacities, but always ask the insurer if he has ever sought an increase in premium rates on any long term care policy. That's where they rip-off unsuspecting and uninformed insurance buyers.
