What Does Long Term Care Insurance Cost? How Benefit Choices Change Policy Cost
Once you decide what kind of insurance will work best for you and your family, it’s time to choose the benefits that meet your goals but fit your budget. Age and health determine which policies you can qualify for. Keep options open and cost down by purchasing a policy while you are younger and healthier. Premium costs for traditional long term care insurance can increase by thousands of dollars a year for an older person, even for someone in perfect health. (For example, a man in perfect health buying a middle of the road policy at age 40 may pay $1,200 per year. But if that man were 70 years old, that same policy could cost over $3100 per year.)
Resident state, marital status and gender can also affect premium costs but these factors vary between policy type and insurance company.
- Resident state – some states specify benefit choices or are considered “riskier” (have higher rates of disabling ailments) by insurance companies.
- Marital status - some polices offer discounts for spouses, life partners, adults living in the same house. Others offer joint and shared benefits to spouses and life partners.
- Gender – some policies determine policy cost according to gender. Policy type plays a role. Life insurance-tied policies may offer lower prices to women since they tend to live longer. Long term care insurance policies may offer lower prices to men since they tend to be cared for by a spouse and require care for less time.
- Benefit Amount – maximum amount paid out per month or year
- Benefit Period - how many months the policy pays benefits
- Deductible Period – how many days after the claim is approved will you pay the full cost of care
- Inflation Protection - potential to increase your benefit amount based. The most common is an increase in benefits compounded annually.
- Types of care covered – although most modern policies can provide benefits for home, community, assisted living and nursing home care some restrict coverage or offer options on how much of your benefits is available for specific types of care.
And finally, the specific policy you choose will affect cost and benefit options. Some of the options related to plan choice are type of plan, insurance company, reimbursement vs cash indemnity, approved long term care plan or accelerated benefits type of plan, payment period (lump sum, lump over time, lifetime). For more specific information check out our blog at https://www.retirementsafetyzone.com/resources-all/what-does-long-term-care-insurance-cover