How to get the most from long-term care policies

No one wants to spend time reading an insurance policy. But if you’re concerned about your long-term care, you’ll read it carefully.

As with all insurance policies, you should check the company’s ratings through an independent rater, such as A.M. Best. You want your insurance company to be around in 20 years when you need it. What else to look for, according to attorney Frank Darras of Ontario, Calif.

• A record of low premium increases.In September, John Hancock raised some of its long-term care premiums 40%, Darras says. “Look for the companies with the lowest premium increases the past 10 years.” Two suggestions: Northwest Mutual and New York Life.
• Flexibility on at-home care providers.Some companies won’t pay spouses or relatives for providing care, Darras says. You’d probably prefer a resident relative to provide some care. “You have people who didn’t read the terms of the policy, didn’t have anyone explain it to them,” Darras says. “They get services, the carrier denies it, and it’s a legitimate denial.”

Having a policy that allows resident relatives to provide care eliminates 90% of claims disputes, he says. And it allows a greater degree of comfort. “If I have the money to stay at home, I don’t want a stranger changing my diaper,” Darras says.

You should choose a policy with a minimum three-year payout. People who need full-scale nursing home care will need it for about that long, Darras says.

Once you start collecting, make sure you have someone to help you with the process. Some companies make the process cumbersome, Darras says, knowing that old, sick people often can’t keep up with the claims process. And some companies will want a plan of care, signed by a doctor, before they’ll pay out. Avoid companies with offshore claims centers.

Small denials can add up for insurance companies, Darras says. “If you trim a few days here and there, times a million policyholders, it adds up to real money.”