You Can Manage Your Long Term Care Insurance Premium
Except for those with an annual income that is worth a billion or more, practically everybody in the country acknowledges the importance of owning a long term care insurance (LTCI) policy. Still, many remain without one and the reason they keep postponing the purchase of a policy is the fear of having to pay expensive long term care insurance premiums.
It’s actually online articles and forum boards relevant to long term care (LTC) that fed their minds with such misconception. Oftentimes, LTC forum board discussions are teeming with whiners who need to voice out that they are much affected by the high premium rates of their LTCI policies.
Truth of the matter is, LTCI premium rates should not be a big issue as these depend on the age of policyholders and their choice of coverage. No insurance company can tell you to pay $2,000 if you cannot afford it. To reduce this amount, you have to adjust the components of your policy.
For example, a policy with a maximum benefit amount of $325,000 for a five-year benefit period, and a 5% compound inflation protection will cost you $2,200 in annual premium. If you are unsure that you can maintain this premium amount, you can reduce your benefits for doing so will subsequently trim down your annual premium.
You can also opt to change your inflation protection rider to simple inflation protection but it will take longer for your insurance benefits to increase. Bear in mind that inflation is the number one force behind the high cost of care. If you’re 40 years old at present, having an LTCI policy which stipulates a maximum benefit amount of $100,000 won’t be a big deal as this amount will double in 14 years or even earlier through your 5% compound inflation protection.
Making Long Term Care Insurance Premiums Affordable
Blending your personal resources with your LTCI policy is a good way to cut back on the latter’s price. Instead of choosing a coverage which will cover 100% of your LTC expenses, you can go for partial coverage.
With a partial coverage, your LTCI policy will cover a portion of your LTC expenses while you pay for the rest. Some partial LTCI policies cover 75% of the insured’s total expenses while there are others that pay 50% of the bill.
If you prefer 100% coverage then perhaps you can reduce your benefit period. If you are going to buy a policy which complies with the rules and regulations of the Partnership LTCI Program you can settle for a short benefit period such as two years or three. In case you would require further care upon reaching the end of your coverage period you can apply for Medicaid and if you are found eligible you will be able to receive ongoing care from this federal health insurance program without spending down your assets.
When buying LTCI policies, buyers should absolutely not brush off long term care insurance premiums but it would be unfair to base their coverage solely on the price tags of their policies. If you need help on this matter, contact a licensed LTCI agent in your area.
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