So you’ve decided to ensure that your long-term care needs are met by buying a long-term care insurance policy, or you’re considering a policy. Good idea. But what kind of policy do you buy? With all the features available, how do you choose?

With almost any policy, benefits are triggered by a certification from your doctor that you need assistance with two of the six activities of daily living (eating, transferring, toileting, dressing, bathing or continence) or cognitive impairment requiring assistance so that you are not a danger to yourself or others. There are two general types of policies or payment designs available: reimbursement and indemnity policies.

A reimbursement policy pays your caregiver for services rendered to you, up to the lesser of the cost of care or the amount of the policy benefit. You must provide receipts for care received from certified caregivers - family members cannot be paid unless they are medical or long-term care professionals. A better policy will allocate benefit dollars not actually spent on a day's care to a pot of money available for future care.

An indemnity policy pays you the policy benefit amount for each day you receive care under the policy, but with no obligation to prove the cost of care received, and with no limitation to the cost of care received. With some policies, the benefit is payable whether or not you receive care from a certified caregiver, so family members can provide the care. Indemnity policies are usually more expensive, but you're buying freedom of choice, since the policy benefit amount can exceed the cost of care and help defray your other costs of living.

Some policies pay a lesser benefit for home health care, assisted living and adult day care. Home health care generally costs about the same as nursing home care, and sometimes costs even more. Assisted living care costs can vary widely, depending on the amount of care you need. Adult day care is generally much less expensive than nursing home care. Choose a policy design that pays the same amount for home health care as nursing home care.

You can choose a policy that pays for unlimited benefits, or a policy with a maximum total payment or total duration. If you can afford unlimited benefits, you will avoid the risk that you will outlive your policy. Then, the cost of care must be paid from your personal assets or by medical welfare, that is, Medicaid. If your cost of care is paid under the medical welfare system, you lose your freedom to choose your care or the place it is delivered.

Under Medicaid, you can be forced to take any available Medicaid bed within 150 miles of your home. This writer is aware of one lady from Carroll County who was receiving care under the Medicaid system and was placed in a nursing home on Baltimore Street in downtown Baltimore. She doesn't get many visits from friends.

If you are under ninety years old, you should choose a policy that provides compound inflation increases in your benefit. The cost of care is increasing between five and six percent each year, and it is facile to assume that the benefit that covers the cost of care now will provide that same level of care later. If you're under seventy years of age, your life expectancy is likely to be at least twenty years, and two decades from now the cost of care will have doubled nearly twice.

That is, the care that costs $200 per day now, increasing at a rate of six percent per year, will cost about $650 per day in twenty years. If your benefit is a flat $200, you will have a shortfall of $450 per day, which you must meet either out of personal assets or by qualifying for medical welfare. The compound inflation rider might mean the difference between choosing your own care and being subject to the medical welfare bureaucracy.

Long-term care insurance preserves your freedom to choose your own care at the location you desire. Make sure you design the policy in such a way that you will be able to receive that care as long as you need it. Work with a qualified professional who will take the time to design the policy you need, and explain it in terms you can understand.