How Much for a Long Term Care Insurance Policy?
Just as the cost of living differs according to region, long term care insurance premiums by state vary, too.
If you’re wondering why that is so it’s because the cost of care varies from state to state. If you’re living in the south or the Midwest and you decide to move to a state in the New England or perhaps anywhere in the northeastern you’ll be shocked at the rates of long term care (LTC) facilities in the latter.
In Louisiana, for instance, a 50-year-old policyholder may be paying $1,000 for the premium of his LTCI coverage but a 50-year-old New Yorker may be forking out twice that amount, or even more, because the cost of care in New York is 31% higher than Louisiana’s long term care (LTC) costs.
Anyone who is thinking of moving to another state after retirement is advised by financial planners to study the cost of living and LTC costs in the state that he plans to move to. It is very wrong to think that just because most people that you know in your state of residence have no problem with the annual premiums of their policies, the same thing is experienced by residents of other states.
Every state has its own economic issues and LTC costs are definitely part of it so if you’re relocating you have to seriously familiarize yourself with the economics of the state that you plan to move to.
Long Term Care Insurance Premiums by State
When you’re buying an LTCI policy you have to note that its maximum daily benefit is one of its very important components. This very important component of your policy is based on the cost of care in your state or area of residence. So if the cost of care in your area is high you will naturally require a large maximum daily benefit amount from your LTCI policy. Now with a large benefit amount you shall naturally be required to pay a higher annual premium.
If you’re going to settle down in a state with extremely high LTC costs you better integrate an inflation protection rider into your policy. As a matter of fact, you have to pay more attention to your policy’s inflation protection rather than to its maximum benefit amount because your benefits will grow in time especially if you are going to invest in a 5% annual compound inflation protection. In less than 14 years your maximum daily benefit amount will be twice its initial amount.
Apart from the cost of care in a state, the ages of its insured individuals will also determine the total amount of premiums collected by the state’s private insurance companies. If majority of LTCI buyers are young and still members of the workforce then they are probably paying less than $2,000 annually for their premiums.
It’s important to familiarize yourself with long term care insurance premiums by state especially if you are contemplating moving to another state sometime in the future. If you know how much you have to spend for an LTCI policy you don’t have to wake up and sleep with fear in your heart.
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