Long term care insurance costs may seem expensive, yet it can be one of the smartest investments you make to safeguard both your assets and independence in retirement.
Your premiums for long term care policies may be tax deductible and/or some or all of their benefits could even qualify as tax write-offs.
Many assume they will not require extended long term care services, but nearly half of people reaching age 65 require some form of significant long term care services. Medicare or Medicaid cover most costs; you could also consider purchasing long term care insurance as a supplement to their coverage.
Price for long term care insurance depends on a number of factors, including age and health. Before making a purchase, it is wise to compare prices from various providers; younger and healthier buyers often benefit from better rates when they purchase coverage earlier.
Some insurers provide hybrid policies that combine life and long-term care insurance. Though their premiums can be more costly than individual policies, hybrid plans can save money by decreasing life insurance premiums.
When purchasing long term care insurance policies, make sure to consider both the benefit period and daily benefit amounts carefully. Most companies provide various options for length of coverage as well as daily limits – the longer and higher these become, the more costly your policy may become. Also keep in mind an elimination period which is the amount of time before payment begins under your policy (usually between 30-60-90-365 days); longer waits mean more expensive policies.
Be mindful that inflation can diminish your long-term care policy’s value over time. According to Genworth’s 2023 cost of care data, an LTC policy purchased when you’re mid-50s that pays out $165,000 annually in benefits with an inflation rider will only be worth approximately $83,051 when care costs increase at 3% on average, for instance.
Long term care insurance market is limited, with only six companies selling individual policies: Mutual of Omaha, Thrivent, Northwestern, New York Life, National Guardian Life and Bankers Life offering standalone plans. Although these companies generally sell similar policies with only minor variations in coverage and pricing differences between their plans; it is best to shop around before selecting one plan over the other.
Some insurance companies provide discounts for being in good health, joining groups or organizations and other factors. Speak with your agent to see what discounts might be available.