Long term care insurance provides protection from the high costs associated with medical and non-medical care for people who cannot provide themselves with their own assistance due to illness or injury, whether this care takes place in their own home, assisted living communities, nursing homes or adult day care facilities. Purchase of long term care insurance is a significant decision that can have a dramatic effect on both your finances and future, yet requires careful evaluation before being made. To make an optimal choice, it is important to carefully consider factors like your age and life expectancy, marital status, health status and assets and income level. Furthermore, you should carefully consider which type of coverage you desire and its cost.
Long-term care insurance premiums tend to rise annually as you age; thus, most experts advise purchasing this coverage as early as possible since qualifying for it later may prove more challenging.
Your premiums depend on several factors, including your age, gender and health status as well as the policy type and company that you select. Some providers offer discounts for couples applying together; rates will likely be reduced accordingly. Also important are choosing how long of a policy coverage period to purchase and whether inflation protection should also be included as part of that coverage.
Make sure to consider all other costs, such as Medicare or Social Security benefits, that might impact your premiums for long term care coverage, such as Medicare or Social Security payments. If you wish to opt out of paying for something you may never use like long term care coverage altogether, try opting for shorter benefit period plans which will lower premiums while potentially running out of coverage before needing it.
Another option for long-term care insurance coverage is a hybrid policy that covers both short and long-term needs, which may be more expensive but could help ensure you don’t run out of funds before needing long term assistance. You should also decide between reimbursement or indemnity policies which could impact the amount and time frame of reimbursement payments.
To accurately assess the potential cost of long term care insurance, the most accurate way is to speak to a financial advisor in your area who can provide quotes on policies available and help you compare costs and features that suit your budget.
To determine the average annual cost of long term care insurance policies, we used AALTCI’s 2022 price index. Below is the result.