Restructuring Concept Of Long Term Care InsuranceAccording to the baby boomers who remain without a long term care plan, they are aware of the consequences that they are going to face soon. When asked why they did not come up with a good plan for their future when they had the chance they said long term care insurance premiums discouraged them.
Is that reason acceptable or unacceptable? Ive figured that you would go for the latter. Had they tried to engage in a heart-to-heart talk with a long term care insurance (LTCI) representative 30 years ago or so, perhaps these 70 to 85 year olds would have realized that paying the price of an LTCI policy is easier compared to the cost of care.
In fact, their contemporaries who have managed to purchase a policy at the age of 50 say they are only paying an annual premium of $1,500 which is not even close to the annual rate of a home health aide let alone a nursing home. By the time they reach 85 and should an event qualify them for long term care (LTC), their policy will pay them more than a million dollars in benefits.
Technically speaking, the buyer himself determines the price of his LTCI policy. To ensure that you dont spend more than what your resources will allow on the annual premium of your policy, LTCI experts advise that you keep your policys variables to a minimum, but dont skimp on the inflation protection rider as this will maintain the competitiveness of your policy.
Since the cost of care is not constant, we should not expect the current rates of LTC facilities to be the same 20 years from now. Every year, these increase so it is very important to have an inflation protection.
How To Get Reasonable Long Term Care Insurance Premiums
1.Stay away from riders. Unless you have the budget for these stick to the basics of an LTCI policy. No matter how enticing the riders may seem as these will only increase your premium until you can no longer afford it. Your policy has only four important elements which are the maximum benefit amount, maximum benefit period, elimination period, and inflation protection.
2.Settle for a three-year benefit period. According to the National Clearinghouse for Long-Term Care Information, an elderly is most likely to need three years of care so this should be enough for your policy. So many policyholders have wasted money on premiums by opting for a five-year benefit period only to end up with three years of care.
3.Consider a high maximum benefit amount. If your maximum daily benefit is $250, chances are your insurer is going to extend your coverage because its impossible to consume $250 a day except if youre living in a state where the daily rates of nursing homes range from $500 to $600 per day.
There are many ways to cut down long term care insurance premiums so every time insurance firms churn out press releases of their possible increase, do not feel intimidated. Seek advice from your trusted LTCI agent.
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