Long term care insurance is an integral component of financial planning for future health needs, providing essential protection from long-term care services that may not be covered by Medicare or traditional health plans. Before making your decision about this form of protection, however, it’s essential that you understand its costs so as to determine if this type of policy suits you.
Insurance companies set their own rates and underwriting standards, so costs can differ considerably between policies purchased. Age also plays a factor: individuals in their 40s tend to pay lower premiums than individuals in their 60s or 70s.
Purchase of long term care policies early is important to remaining healthy and young, since waiting until later will only cause premiums to skyrocket. A couple who purchases an $165,000 level benefits policy at age 55 could pay an estimated annual premium of $2,220; once they reach 65 their monthly premium would increase 24% while at 85 it will increase another 45%.
When searching for long term care insurance policies, it’s essential that you obtain quotes from multiple providers or brokers, so as to make an informed decision. Also keep an eye out for features like inflation protection; long term care expenses tend to increase and an inflation rider could help shield your savings against erosion over time.
Apart from premium costs, it is also important to carefully examine the terms and conditions of any long term care policy you are considering. You should obtain information regarding what services the policy covers as well as when benefits will begin and for how long. Typically policies have an elimination period between 30 to 90 days that passes before benefits start to flow from them;
Final consideration should be choosing an insurance carrier with an excellent track record. When gathering quotes, consider their AM Best rating, customer service reviews and National Association of Insurance Commissioners complaint indices as indicators of this. Selecting an insurer with solid financial backing will help give you peace of mind that they’ll be there when needed to pay out claims.