Long term care insurance costs may seem intimidating when considering purchasing a policy, but there are ways to lower them: use premium savings as down payments on future long-term care expenses or opt for policies which allow you to spend your own savings before paying out; additionally, many companies now provide inflation protection options which may lower overall costs over time.
Long-term care (LTC) policies provide financial coverage for your long-term care expenses, such as nursing home stays and in-home health aides, meal delivery services and medical appointments transportation services. You can purchase these policies both as stand-in policies or add-ons to life or disability policies.
Cost of long-term care insurance varies based on the type of policy coverage desired and age at purchase. Typically, as you become more at risk of needing assistance through the policy as time progresses, its price will also depend on factors such as daily or monthly benefit amounts you choose as well as whether coverage can be extended over multiple years and inflation options available to the policy.
Todd Wolfe, senior insurance associate of Telemus, states it’s essential to consider these factors when searching for long-term care policies. But he emphasizes the need to consider your financial situation and goals as well. “There are policies available that can meet nearly any budget,” according to him, but often what makes the difference will be whether you think you can afford an increase in premiums as you get older.
According to data from the American Association for Long-Term Care Insurance, an individual aged 60 years paying $1200 yearly for long-term care coverage with $165,000 of coverage will pay approximately this sum; married couples may find more cost-effective solutions by purchasing joint policies with a combined maximum limit.
Tax-advantaged accounts may help cover premium costs, while some policies allow you to deduct them entirely from income taxes. All these tactics may help lower costs associated with long-term care insurance policies, but the key way is purchasing one sooner rather than later.
Studies conducted by the National Consumers League reveal that waiting two decades to buy long-term care insurance could mean paying twice as much in premiums than someone who buys at age 55, thus emphasizing its importance and urgency in researching options and pricing of policies as early as possible. Long-term care policies not only lower premiums; they can also protect assets against being used for long-term care expenses that require you to spend down your assets in order to qualify for Medicaid.