Many Americans do not know about long term care insurance, or LTCI. They do know that it is required by law for most Americans over the age of 65 to have this type of coverage, but they are not sure exactly how much it will cost them each year. Well the good news is that it is actually very affordable, depending on the type of policy you decide on and what you choose to cover. Some plans will cost less than one hundred dollars a month, while others can reach up to several thousand dollars a year. Here are some tips to help you find the best long term care insurance at the best price.
First, you need to decide whether you want your long term care policy to be guaranteed or not. Most policies today come with a guarantee that the policy holder will receive some kind of nursing care in a nursing home when they become incapacitated. This part is usually referred to as “floor” or “cash value”. Most long term care policies with these clauses pay the full cost of nursing home care in case the policy holder is unable to get around their own needs due to old age or other medical problems.
Next you need to understand the actual cost per month of a long term care insurance policy. These plans can cost anywhere from four hundred dollars up to more than ten thousand dollars per month. The cost of LTC benefits depends on your age and the total amount of coverage you choose to purchase. While there are many factors that affect the cost of a long term care policy, such as your health conditions and your family medical history, there are a few things that you can do to lower the cost.
First you should consider what type of care you will need at the level of coverage you purchase. Some policies cover only custodial and personal care, while others cover all of the services in an assisted living facility would provide. Other coverage options may also include use of the facilities and certain equipment and may not include all of the services provided by those facilities. Be sure to carefully review the policy document to be sure you know exactly what is covered and what is not. Also, keep in mind that the cost of assisted living services can vary greatly between states, so it’s a good idea to familiarize yourself with the laws governing these services in your own state before buying a policy.
As far as discounts and rate adjustments go, remember that most insurance companies offer some sort of reduction for long term care insurance customers who enroll in a high deductible plan, or who take out more than one policy from the same insurance company. This is usually a percentage reduction of the overall policy price and is based on how much more it costs to insure the customer. Also, there are a number of federal and state programs that help financially disadvantaged seniors with high medical costs, including prescription coverage, health education, and long term care insurance. There is a long waiting list in some cases for these types of programs, however, and it is worth the effort to see if you qualify for any of them before enrolling. Be sure to check eligibility requirements before shopping for coverage.
You may also be able to reduce the cost of your insurance rates by bundling your other insurance needs. If you own a home or own a life insurance policy, you may be able to get a better deal by bundling those policies. For example, many insurers will provide a lower rate on an insurance policy if you agree to pay a co-payment (increase your deductible) for your primary insurance policy. You can negotiate additional savings on your long term care insurance by bundling your home and life insurance policies.
There are also several government programs that you can qualify for, including Medicare and Medicaid, to help cover your long term care insurance costs. In addition, there are many resources you can tap into to find discounts on these types of policies. For example, you may be able to save money by bundling your auto, life, renters or health insurance policies with the same company. Or, you might be eligible for a rate reduction if you maintain your current car insurance policy or your homeowners’ insurance policy with the same provider. There are also a few resources where you can apply for discounts.
The final area where you can control your insurance cost is whether or not you choose the right coverage. For example, a lower deductible equates to a lower monthly premium, but you have to remember that you will still need coverage in case of an accident. Likewise, lower coverage means a higher total cost in the event of a claim. Your choice of coverage ultimately impacts both the cost and the benefits you will receive in the event of an accident or illness.