Long Term Care Insurance Premiums
By the time you have a house and kids, you have been offered every type of insurance. Some people buy everything they are offered figuring there is no such thing as too much coverage.
Then there's the crowd who turn down every insurance offering that arrives in their email.
Be sure to always compare quotes and plans before making any decisions. Use our FREE comparison tool above to get started!
Why buy long term care?
Long term car insurance is one policy type worth giving a second chance. At some point you build wealth, whether a huge estate or more modest investments, such as a house and a healthy retirement.
If you are stricken with long-term illness or just unable to live without supervised care, you might have to sell off all your belongings and liquidate accounts, which would impact two fold.
You might live beyond the need for long term care, therefore need the money you had otherwise saved. In addition, if you are not here for the long haul, you may have dependents who rely upon the house to live in, or cash to live on after you are gone. Self preservation, for the right now and into the future, is the reason long term care insurance products exist.
Nursing care, whether at home, or in a skilled nursing home is costly. The cost of care runs through a solid savings account very quickly. That is why long term care insurance is a wise purchase.
Like with any insurance, the long term care insurance premiums can vary widely among different insurance plans. Long term care insurance does have limits, though it is typically intended to cover two to five years worth of care. It includes such care as in-home, community or facility care.
Background on LTC Insurance
Health care professionals evaluate clients for eligibility for long term care depending upon their ability to perform what are known as activities of daily living, or ADLs.
List of Activities of Daily Living
- Meal Preparation
- Feeding Self
- Laundry
- Medication Management
- Cleaning
- Bathing
- Shopping
- Walking, Mobility
- Dressing
- Communication
- Using the Bathroom
In general, once you have trouble meeting a set number of ADLs, you qualify for varying degrees of assistance. Look for a combination of care options in exchange for your LTC premiums.
The cost of insurance is affected by:
- Your age when you purchase the policy
- The number of days, length of time the policy will pay
- Daily policy limit
A good term to learn is the lifetime maximum the policies each will pay when comparing quotes. Determine the lifetime maximum the policy will pay by how much the insurance pays daily times the number of days.
Long term care insurance increases tremendously in cost as you age. This means that the longer in your life you wait to buy coverage, the more expensive it becomes. It is typically terribly expensive if you buy at 60 years old compared with buying at age 40.
LTC Exclusions
It is important to know that you cannot buy coverage if you are already in need of long term care. If you fall into one of the following instances, typically you will be denied you long term care coverage:
- AIDs
- Metastatic cancer
- Need assistance with activities of daily living
- Had a stroke in recent years
- Alzheimer's
- Dementia
- Progressive neurological diseases, such as Parkinson's disease.
It is similar to buying life insurance or disability insurance because they typically require medical tests, or medical underwriting. Some group plans will forgo the medical testing in exchange for automatically higher rates for long term care insurance.
What does long term care provide?
When you buy a long term care policy, you have the option of how you spend the money for care. For instance, you may have a preference for in-home care rather than hospice care for compassionate end-of-life care.
- In home
- Adult day care
- Hospice
- Respite Center
- Assisted living
- Alzheimer's care centers
- Nursing home
Reading policy offerings when comparing quotes is vital. The reason is that policies all offer so many different levels of care. Care may include simple monitored care, where an elderly person lives in an individual or shared apartment in an adult care facility where prepared meals and cleaning services are provided.
If needed, they are moved to a skilled nursing care wing. Services for in-home and onsite care include physical therapy, rehabilitation therapy, personal care services and medical care.
Some long term care facilities provide skilled nursing, hospice and Alzheimer's care all in the same location.
Consider Buying Additional Benefits
Now, long term care insurance is enough of an expense for many policyholders. If you can afford to buy additional, or optional benefits, it may help. For instance, an inflation guard, which makes sure your policy payouts keep pace with inflation.
Comparing Long Term Care Coverage Quotes
Buying long term care insurance is a bit of a balancing act. You do not want to buy too much or too little coverage. To evaluate coverage, take into account how much money you have to supplement your care. In addition, in some families, everyone is willing to pitch in on care. That type of scenario automatically reduces the financial burden on care, at least some.
If you are alone in this great wide world, then buy more insurance. You are better off buying too much coverage, because you can dimmer down on insurance if you do not use it. Though, once you commit to a policy, it is difficult if not impossible to buy more long term care insurance.
When comparing the policies, be on the lookout for additional benefits. Such benefits may seem useless while others may prove invaluable. If you have questions about how much a facility may charge for items such as medical supplies, meals and even cleaning services, just ask. You might be surprised to find that those areas might deplete your insurance faster than you think.
Is life insurance better than LTC?
Some insurance products are too specific. You may wonder, what if you never need long term care, but do need to beef up your financial investments. That's why some individuals prefer to buy life insurance with investment arms that build up cash value over the life of the policy.
If you buy such a policy as universal life insurance you choose how to spend the money. If you need to tap into the funds to cover a family member's illness, then you can. Though, if you pay for long term care coverage and never use it, while you are happy not to, it feels like money wasted.
Consider looking into dual-purpose life insurance policies in addition to long term care coverage. Look at dual life and long term care products, life settlements, life insurance with accelerated death benefits and viatical settlements.
Viatical settlement is a position where a terminally ill individual agrees to sell their life insurance to another party for less than the face value to cover medical and long term care expenses. Another option is to buy a rider to a life insurance policy that allows you to take out an advance against the death benefits.
Once an individual considers viatical settlements or advanced death benefits, they typically have less than one year to live and need the money to pay for the hefty medical expenses.
Long term care insurance is exactly as the name implies. It is intended to cover daily care costs over the course of up to five years of care, typically. A need for care with activities of daily living, such as medical care, bathing and medication management indicates when long term care insurance policies are necessary.
Shopping around for LTC insurance quotes is easy. Comparing the quotes to find the best policy for your needs is the challenge. It is worth it, so stick with it until you find the right policy at the right price.
Be sure to use the FREE search tool located below to get started!