LTC COST

LONG TERM CARE INSURANCE COST

long term care insurance cost 1Long Term Care Insurance cost can vary depending upon your age, your health, the amount of coverage you choose, and any special options you may choose. Long Term Care Insurance is a necessity in today’s world and can be affordable if you buy at the right time and choose your benefits wisely. You must find the balance between too little insurance and too much insurance, since you after all, may never use it.

The following are a few variables that may affect your Long Term Care Insurance cost:

Age:   Your age will affect your premium about 3% to 5% per year. You should be cautious and through and never rush when analyzing all of the differences in the Long Term Care cost , even though some pushy “live” insurance salesmen may try to pressure you to immediately buy because of an upcoming birthday.

Health: Your health can dramatically affect the price of the policy and may even disqualify you from a policy all together. Some people will wait to buy a policy and because of a sudden onset of an illness or accident will be labeled “uninsurable” by the insurance companies, and will lose all the assets they have worked so hard to acquire to the high cost of nursing homes. It always better to buy Long Term Care insurance while you are healthy (and young).

Options: There are many options or “riders” that you may purchase. Some make sense, but many can just substantially increase the cost of the policy. It is best to ask for the advice of a professional like Long Term Care USA in selecting the appropriate options. Beware of insurance agents pushing options that you will never need just to increase the cost of the insurance.

Discounts:  There are married and preferred discounts available, which can substantially lower the cost of the insurance. Be sure and inquire what discounts are available. These discounts often apply to brother and sister.

Longer Elimination Period: The elimination period is the time you pay out of pocket before the policy starts to pay. Increasing you elimination period from 0 to 90 days can save you 10% to 15% annually.

Annual Premium Payments:  You can save up to 8% just by sending your payment in one lump sum on the yearly anniversary date of your policy. Don’t worry, your insurance company will send you an annual reminder of the premium.

If you wait to buy a policy, the premiums will raise dramatically (typical policy increases):

  • PURCHASED AGE 50    COST OF PREMIUM   $1587
  • PURCHASED AGE 55    COST OF PREMIUM   $1843
  • PURCHASED AGE 60    COST OF PREMIUM   $ 2355
  • PURCHASED AGE 65    COST OF PREMIUM   $ 3024
  • PURCHASED AGE 69    COST OF PREMIUM   $ 3966

How people pay for long term care insurancelong term care insurance cost 2

People have found unique and effective ways to pay for and help with the Long Term Care Insurance cost. Many people who have their home paid off can afford to use part of their return on their investments and part of their Social Security payments to pay for policies. Here are a few of these ways:

  • Use the interest from a savings account
  • Use the interest from a CD (certificate of deposit)
  • Use their Social Security to pay for premiums, while living off the income of their assets
  • Many married couple live off of the spouses Social Security while both living off of the husband’s Social Security
  • Using the dividend income from stock that they own
  • Some retirees use the income from a part time job
  • Using the interest income from an annuity

Cost of waiting effect on Long Term Care insurance Cost

Please note that a person waiting may not be able to buy LTC Insurance at any cost, because long term care insurance cost 3due to a sudden illness or accident, the Insurance companies may not sell him a policy and he/she may be considered “uninsurable”.

  • $130 daily benefit or $3900 monthly
  • 2 year benefit period
  • 100 day elimination period
  • 5% compounded inflation rate

AGE      YEARLY PREMIUM     TOTAL PAID TO 85 YRS       TOTAL BENEFITS

AGE 55               $1255                          $37650                               $410,150

AGE 60               $1548                           $38700                               $321,350

AGE 65               $2090                           $41,800                              $251,800

AGE 70               $3136                          $47,050                               $197,300

AGE 75              $4965                           $49,650                               $154,600

The example above shows that the earlier you purchase insurance, the more benefits you will receive due to 5% policy benefit compounding and the premiums you pay when your 55 will be lower than the one you would pay at 70, and typically the total premiums paid will be less. Therefore, Long Term Care Insurance purchased at an earlier age typically has have smaller premiums, less total premiums, and much more benefits, due to the compounding benefits. Also, by waiting to purchase LTC insurance, you run the risk of not being able to be insured due to a future illness or accident. Buy early.

Percentage of people denied Long Term Coverage at various ages according to the 2011 Source Book for Long Term Care Insurance Information

  • Under age 50  11% were denied coverage
  • Ages 50 to 59 17% were denied coverage
  • Ages 60 to 69 24% were denied coverage
  • Ages 70 to 79 45% were denied coverage

Can Insurance companies increase my premiums for Long Term Care Insurance in the future?

long term care insurance cost 4The answer to this question is a qualified, “Yes”. Insurance companies can never increase your policy premium individually. However, insurance companies can increase all the policyholders of a certain policy, but they must request it and only if approved by your state’s Department of Insurance. Long Term Care USA can show you the select Insurance companies that have never had a rate increase in your state. Just fill out the form below to request information.

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