Not Everything Goes To Long Term Care Insurance Premiums

Given one has to plan his healthcare, it does not follow that he should put all of his money in long term care insurance premiums.

Nobody will argue that long term care insurance (LTCI) is indeed expensive. As a matter of fact, LTCI specialists will tell you that it is not for everybody. Ideally, they will say, one has to have at least $5,000 or more in monthly income so that he can confidently and comfortably pay his annual premium.

While it’s true that it’s designed for people with assets, an average office employee cannot just sit down and watch the cost of care increase by the year. Then what? Beg Medicaid to come to his aid? Even average folks are born with dignity and this explains why there are so many of them who invest in LTCI policies despite their modest income.

Truth of the matter is, a recent report courtesy of the American Association for Long-Term Care Insurance revealed that the population of insured residents in 25 states has increased. Isn’t this a clear indication that practically everyone in the country is exerting effort to plan his healthcare?

Perhaps, they understand that the cost of their annual premium is more affordable than a year’s stay in a nursing home or an assisted living facility. A 40-year-old who buys a comprehensive policy with a maximum daily benefit of $200, an elimination period of 90 days and lifetime coverage will only pay an annual premium of $950. Now, compare this amount with the national median annual rate of assisted living which is $39,132, or that of a nursing home which is $77,745 based on the Genworth Financial 2011 Cost of Care Survey.

Where did you save more?

Cut Down Long Term Care Insurance Premiums

Identify your possible healthcare needs so that you know how much you will need to be able to cover your LTC expenses.

The price tag of your policy will be based on your maximum benefit, length of coverage period, elimination period, and inflation protection rider. To determine your maximum benefit, you should first determine which type of LTC setting you want to be in should the time come that you will require care.

For instance, if you are predisposed to a certain type of chronic illness which will require intensive care someday you can consider the cost of a nursing home as you calculate the amount of your policy’s maximum benefit.

Meanwhile, if your family’s health history reveals old age is the main cause of death then you can probably receive care at home. You can base your maximum daily benefit on the cost of homemaker services and a home health aide.

All it really takes to clinch a policy that is within your means is analysis and negotiation. If you are earning only enough every month to make ends meet, you have to negotiate with your insurance agent to avoid overspending on long term care insurance premiums. It was, after all, Eldercare Specialist Dr. Marion Somers who said your LTCI policy is what you negotiate for.

Have a worry-free retirement by purchasing long term care insurance. Get practical tips on lowering the premiums of long term care plans.