Insurance policies are often billed as a safety net, but it's important to carefully assess what the policies actually offer and where there are holes. Policies are rarely easy reading, but time spent looking through them can prove worthwhile. Caregivers need to be particularly aware of certain insurance issues.

Health insurance. Medicare, Medicaid, and private health insurance may cover many caregiving costs and open up options you haven't considered. Medical equipment, adult day health services, nutritional supplements, acupuncture and other complementary care, massage, home health aides or homemaker services, respite care, health and home assessments, and many other products and services may be partly or completely paid for by insurance. Naturally, coverage offered through private health insurance and public health benefits varies widely. Read existing policies and call the insurer for more detailed information. Check with the Centers for Medicare & Medicaid Services for information on those government benefits.

Life insurance. Life insurance pays benefits upon a person's death. Some policies also act as collateral that the insured can borrow against. Or it may be possible to collect benefits early to apply them to home services or long-term care. Called "living benefits" or "accelerated benefits," these arrangements vary greatly in how much is paid out, whether it is a lump sum or regular payments, and who can invoke this option. Generally, the insured must have a year or less to live. Of course, life insurance should not be casually cashed in even when money is tight. Often arrangements to raise funds this way pay only a fraction of what the policy is worth and may have an impact on taxes and eligibility for other benefits, including Medicaid. Look closely at the costs and benefits of any offers.

Long-term care insurance. Long-term care insurance can help a person avoid draining his or her life savings to cover the costs of long-term medical care, ranging from home health services and skilled nursing care to assisted-living facilities, adult day care, and nursing home care. But policies can be pricey and complex. What you should know about long-term care insurance (LINK TO LONG TERM CARE ARTICLE) can help you evaluate whether or not a long-term care policy is right for your loved one and, if so, what to look for in a policy.

Source: from Caregiver’s Handbook, Harvard Health Publications, Copyright © 2007 by President and Fellows of Harvard College. All rights reserved. Used with permission of StayWell.  Use of Content | Medical Disclaimer