PAY ATTENTION TO LONG-TERM CARE POLICY PROVISIONS (FINANCIAL FOCUS)

This "Financial Focus" column is prepared by Edward Jones Investments, headquartered in St. Louis. Jones includes branches throughout the nation, including Cape Girardeau and Jackson.

Over the past several months, Congress has started paying attention to an issue that's already on the minds of millions of Americans -- long-term care insurance. Some legislators have proposed ways in which the government could provide tax breaks for individuals purchasing long-term care policies.

As with any new laws, however, those pertaining to long-term care may take years to enact. You may want to act sooner to protect yourself and your family from the potentially devastating costs of an extended nursing home stay. On average, a year in a nursing home costs $40,000, and it can cost twice that much in some major metropolitan areas, according to the Health Insurance Association of America.

Of course, you may never need any long-term care services. But why take a chance on incurring costs that can deplete your financial resources and possibly cause great hardships to your family? An appropriate long-term care policy can give you the protection you need. And the earlier you purchase such a policy, the lower your annual premiums will be.

When- you shop around for cove-rage, look for the following important features:

• Inflation protection -- Long-term care costs are expected to rise. To ensure adequate coverage, look for a policy that offers inflation protection. Some policies allow you to increase coverage every few years, while others do so automatically.
• Appropriate benefit period -- Few people need lifetime benefits. In fact, less than 2 percent of nursing-home residents stay in a facility more than five years, although some conditions, such as Alzheimer's, obviously warrant longer stays. When choosing a policy, you'll probably want three to six years' worth of coverage.
• Waiver of premiums -- This provision allows you to stop paying premiums during the time you receive benefits. Make sure you carefully read the policy for any restrictions, such as a required minimum stay.
• Nonforfeiture benefits -- This benefit returns some of your payments if you drop your coverage. You can choose to receive a refund in cash, usually as a percentage of the premiums paid. You also can elect to continue your coverage, but with a reduced daily payment amount. Keep in mind that a nonforfeiture benefit, while valuable, can significantly add to your policy's cost.
• Home health care -- Not everyone needs to go into a nursing home to receive long-term care assistance. Look for a policy that pays benefits for home health care as well as for a nursing home.

These are only some of the key provisions to watch for in a long-term care policy. You may want to consult with a financial professional to help you pick the right policy for your specific needs.

One final thought: Consider talking to your parents about long-term care, too. It's not an easy subject to discuss, but it could benefit everyone.

The Southeast Missourian does not recommend that readers buy or sell stocks featured in this column, which is provided for informational purposes only.