Calculating Long Term Care Insurance Premiums
By surfing the Internet youll find many authority sites relevant to long term care
insurance that are equipped with advanced tools that allow potential policy buyers to calculate their possible annual costs for long term care insurance premiums.For example, some of these websites will just ask you to provide your birthday and preferred coverage then voila, your premium will instantly appear on your computer monitor in a manner which represents your preferred mode of premium payment.
Long term care Insurance (LTCI) companies allow policyholders to pay their LTCI premiums on monthly, quarterly, or annual installments You can choose the continuous payment option which means you have to pay your insurance premiums up to the time an event triggers your LTCI benefits to start rolling.
However, in the event that you get better and stop receiving benefits from your policy you have to start paying your premium again, otherwise your policy will lapse. The continuous payment option guarantees lower premiums especially if the policyholder is not at risk of requiring care in the next 10 years.
Another way to pay your premium is through the limited payment option which is divided into three subcategories namely single premium, 10-year or 20-year premium, or the pay-to-65 premium plan. This mode of payment equates to a higher premium as the insurer will be receiving payment from the policyholder for a limited time only.
With single-premium payment, an individual has to settle the total price of his LTCI policy through one- time payment only then he doesnt have to make any other payments for his policy after that.
Under the 10-year or 20-year plan, the policyholder will have to pay the aggregate premiums of his LTCI policy in a period of 10 or 20 years. This type of plan usually comes with a 10-year or 20-year rate guarantee which will spare the policyholder from being subjected to possible premium rate increases which the insurer can impose on a particular class of LTCI policies.
Meanwhile, the pay-to-65 plan allows the policyholder to pay his premium until he reaches the age of 65. Unlike the single premium payment, 10-year plan and 20-year plan, individuals who opt for the pay-to-65 plan are subjecting themselves to premium rate increases which the insurance company can implement upon the states approval.
Long Term Care Insurance Premiums
Although insurance companies can request a premium rate increase from the states department of insurance, its the policyholders who initially determine the rate of their monthly or annual premiums through certain factors.
One of which is their choice of premium payment mode which has been discussed earlier. Ones age and health definitely factor in the computation so the younger and healthier you are at the time you purchased your policy, the lower is your premium.
Your policys maximum benefit amount, benefit period, waiting period, and inflation protection are other very important factors to consider when determining your long term care quotes and LTCI policys premium. You should seriously discuss all these with a trustworthy LTCI representative to save yourself a chunk of money on long term care insurance premiums.
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