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The basics ...Don't buy more long-term coverage than you'll need

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Consumers should purchase only those long-term care benefits they actually need, rather than merely accepting and paying for extra benefits being pushed by insurers, said Martin Weiss, PhD, chairman of Weiss Ratings Inc., in a news release.

If chosen carefully, however, long-term care policies can provide vital protection down the road, he added.

To help consumers navigate the complex maze of long-term care policies available, Weiss Ratings has recently compiled a national database of benefits, prices and ratings, advising consumers to follow five basic steps:

Step 1. Make sure you actually need long-term care insurance. You may have a sizable nest egg of savings to cover your health care costs and no need to pass on those assets to your heirs, or you may have family members who will take care of you. In either case, long-term care insurance is not an absolute necessity; it's merely an option.

Step 2. Buy long-term care insurance at a stage in your life that is best for you not best for the salesperson. If you buy when you're too young, you could wind up paying premiums for many years unnecessarily. If you wait too long, the premiums can be exorbitant.

The chart shown on page 23, based on Weiss Ratings' database covering approximately 14,100 premium quotes for 20 companies, can help you time your decision.

Rates rise gradually until you approach age 60, and begin to skyrocket soon thereafter.

At 60, for example, you'd pay an average of $771.19 per year for a comprehensive policy covering nursing home care, community-based care and home health care with a four-year benefit period, a 60-day deductible period and a $100 daily benefit.

By contrast, at age 70, you can expect to pay, on average, $1,699.61 more than double the amount for the exact same policy.

Step 3. Buy only the benefits you need. The bare-bones basics, with no special extras, are nursing home care, community-based care (e.g., adult day care, assisted living, etc.) and home care. Benefits that might be nice to have but which you may not need include:

?Inflation protection. This is less important if you will be collecting benefits within the next few years. It is more necessary if you expect to use the benefit 10 or 20 years down the road.

?Waiver of premium. This lets you stop paying your premiums once you've been receiving benefits for a certain length of time. For instance, if a disability or illness prevents you from earning an income, this would allow you to stop paying premiums during that period.

?Nonforfeiture. You don't lose what you've paid into your policy even if you stop paying premiums.

?Restoration of benefits. Even if you've used a portion of your maximum benefit period, if enough time elapses with no further claims, your full maximum benefit period will be restored.

Plus, there are three other ways you can reduce the cost:

?You can accept a lower daily benefit;

?You can accept a shorter coverage period; or

?You can ask for a longer deductible period, (i.e., the time when you pay your own expenses before the insurance kicks in).

Step 4. You can save a lot of money by shopping around. Often, you can find a cheaper policy with another company offering almost the same benefits. Some companies may be trying to make a larger profit, while others may be out to get more business. On the other hand, some companies may assume you're a significant risk, while others do not.

Step 5. Make sure your insurance company is going to live longer than you do! In the early 1990s, several large insurance companies failed. Today, most long-term care insurers are financially stable, but some are not. Consumers can obtain customized lists of long-term care policies based on their individual circumstances and outlining benefit options, premium rates offered in their state and the Weiss Safety Rating for each company at a cost of $49.

Weiss Ratings can be contacted at 4176 Burns Road, Palm Beach Gardens, Fla. 33410, or by calling 800-289-9222. For more information, visit the Weiss Ratings Web site at

In addition to long-term care reports, Weiss Ratings issues customized reports on Medicare supplement insurance, safety ratings on more than 16,000 financial institutions, including HMOs, life and health insurers, Blue Cross Blue Shield plans, property and casualty insurers, banks and brokers.

Weiss also rates the Y2K preparedness of many insurers and banks, as well as the risk-adjusted performance of more than 5,000 mutual funds.

Weiss receives no compensation from the companies it rates. Revenues are derived strictly from sales of its products to consumers, businesses, agents and libraries.

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