No, a “rider” is not some hot guy sitting on his Harley. At least not in the insurance world.
In the insurance context, a rider is something that is added to an insurance policy to “soup up” the policy.
I want to share with you the riders that in my opinion are worth considering adding to a long term care policy.
Please note that these must be added at the time of initial purchase—you generally cannot add them after the policy has been in force. The exception to this is that during your initial 30 day free look period you can likely add them.
This is a favorite of mine. It’s a way to add flexibility to a policy when you and your spouse or partner both have coverage. By adding the Shared Care Rider, it puts a bridge between your two policies.
This bridge basically links the two policies allowing either of the individuals to tap into the other’s policy after they have used up their own.
Let’s say that I have a policy that would provide three years of care for me and my spouse has a policy that would provide three years of care for him. I need care for more than three years. Even though my benefits have been used up, I can now start to use my spouse’s policy.
Some voice concern that my spouse would now have fewer or no benefits left in his policy. But think about it. He may have fewer insurance benefits but he also has the assets that we did NOT need to spend paying for the years of care that were covered by my insurance policy. Those assets can be used for any reason if he continues to be healthy or used to provide care for him if needed.
This one is SO important. With the average age of the purchaser of long term care insurance currently around 58, chances are the cost of care will increase fairly significantly by the time care is needed.
An inflation rider provides a mechanism for the value of the policy to increase over time, hopefully keeping pace with rising health care costs.
There are numerous options available to address inflation and the best one for you will depend on your age and your finances. Here is no one-size fits all for an inflation rider and it’s important that your insurance advisor discuss this with you.
It’s is definitely less expensive to not have an inflation rider but it is what enables the value of your policy to grown with increasing health care costs.
Waiver of the Elimination Period for Home Care
Depending on the insurance company, this may also be called First Day Coverage for Home Care.
The “elimination period” is the period of time that it is your responsibility to pay for care before the long term care insurance policy starts to pay for your care. At the time of purchase you have the option to choose this period of time. The most commonly available choices are 30 days or 90 days.
Almost without exception, the clients I work with have the goal of remaining home for as long as possible if they need care.
At the time that care is needed, realizing that you are responsible for the first 90 days of care may be daunting even though it may have seemed very manageable when the policy was purchased.
Having this waiver on your policy means that you are NOT responsible for those first days of care. Your long term care policy will reimburse you back to day one of your home health care benefits.
Having this rider can significantly reduce your out of pocket expenses at the time of a claim. If you get home care, the insurance company will pay your benefits for that first period of care.
Some insurance companies even use those days that you’ve gotten care at home as a credit towards any days that might be responsible for if you later went into a facility.
Perhaps more important than the financial benefit of this policy is the sense of relief that it can give your family members at the time of a crisis to know that there are resources available to help care for you.
Are Riders Worth the Cost?
That’s a decision that you will have to make with your insurance specialist. Each person’s needs are different. An option may be very important in one situation and far less important in another.
There are other riders available. Each adds a level of additional benefit or flexibility to your policy. Each also adds to the cost of your policy. These are the three that I think are most important to consider and provide the most bang for your buck.
Sorry, the rider on the Harley isn’t an option!