Category Archives: Long Term Care Insurance Costs

Should Siblings Pool Resources and Buy Long-Term Care Insurance for a Parent?

A long-term health event can happen to anyone, and the chances of an event occurring only increase as we age. In fact, it’s estimated 70% of people over age 65 will need some form of long-term care in their lifetime. The problem is, home care or care in a facility is expensive and can deplete a family’s savings quickly.

That’s where long-term care insurance comes in. Individuals and families can transfer their risk to an insurance company to pay for or help cover the cost of long-term care services.

However, not everyone in their retirement planning ages can afford the insurance coverage they need. In some cases, children may step in to pay for long-term care coverage for mom or dad or both. Continue reading

A Look at the Rising Cost of Long Term Care

Genworth Financial recently released their annual 2017 Cost of Care Survey Findings. For 14 years, Genworth has examined and documented trends across the long term care services market. It’s not surprising that their results have found the costs for care services steadily rising over the years for home care, nursing home care, and everything in between.

To help you digest their new 2017 survey report, we’re providing an overview of their findings based on the national median rates for various care settings.

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What Is the Cost of Waiting to Buy Long Term Care Insurance?

You may understand the value of Long Term Care insurance, but like many people, you may choose to wait a few more years to buy coverage. But did you know there is a cost of waiting when buying Long Term Care insurance?

Waiting a few more years could cost you more money in premiums or you may no longer be eligible for coverage. If you wait, make sure you understand the true cost of waiting.

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Is There Such a Thing as Affordable Long Term Care Insurance?

Long Term Care Insurance protects your income and assets in the event you’re injured, ill, or cognitively impaired. But is there such a thing as affordable Long Term Care Insurance (LTCI)?

LTCI may not be the best fit for everyone. But if you have assets to protect and income to pay for it, affordable Long Term Care Insurance options are available.

LTCI policies can be customized to fit your needs and your budget. By adjusting the plan features and accessing discounts, you can protect yourself from the financial risk of long term care while keeping coverage affordable.

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Long Term Care Insurance – Coverage to Fit Your Budget

Many often wonder, “Do I have to speak with an insurance agent to find out of the cost of long term care insurance?” We have good news for you.

There won’t be an awkward sales pitch at your kitchen table, or lengthy invasive phone calls. Much can be done over email and text, and a ton can be learned simply by perusing this website.

Our long term care insurance specialists help find you the right coverage based on your age, gender, marital status, and state.

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Is Long Term Care Insurance Worth It?

Am I ever going to use it? Is future coverage worth the premiums I pay now? Is the cost of long term care insurance worth it?

These are common questions people wonder when considering if long term care insurance is worth it. Buying long term care coverage may depend on if you have the income to pay for it and assets to protect.

The following information can help you understand the value of long term care insurance so you can know if it’s right for you.

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Long Term Care Costs – What You Need to Know

Long term care costs can vary based on your location, where you receive care, and the level of care you need. Learn more about what you need to know about long term care costs below.

Cost of Care Varies by State

The cost of care varies based on your state of residence or the state you plan to receive care. For example, the annual cost for home care in Alaska is $60,000 (according to 2015 statistics). In comparison, a year of home care in Texas costs $45,000.

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New Types of Long Term Care Insurance: Hybrids & Short Term Care

An experienced LTC specialist would tell you that long term care insurance isn’t for everyone. Sure, everyone needs to go through long term care planning, but other options may be more suitable for different individuals or families.

Enter: Hybrid products or short term care insurance as a solution. These products joined the market in recent years to offer a similar but different solution than traditional long term care insurance. With these additional options available, you’re not limited to a “one-size fits all” approach to long term care planning.

Learn more about these two alternative options to discover if one may be better for you.

Hybrid Products

What is it?

A hybrid product packages life insurance or an annuity with long term care coverage. This option allows heirs of policy owners who die to receive a partial refund of premiums if the policy owner didn’t use their LTC coverage.  They also bring guarantees to never have a premium increase.

Why should I consider it?

Hybrids may be a great solution for higher net worth individuals concerned with long term care planning. They often require a single, upfront premium ranging from a minimum $50,000 to $130,000 or more for average users.

Hybrids may also be a great choice for individuals with appreciated annuities or life insurance. In this case, they may transfer money from these policies tax-free to a hybrid through a 1035 exchange.

Is there a trade-off?

Yes. With hybrid products, your heirs receive a death benefit, but this option often provides less long term care assistance than a traditional policy. This may satisfy the burning question of, “Will I use it?” But it may not cover all your care needs.

Short Term Care Insurance

What is it?

Short term care insurance offers a shorter benefits duration (typically 12 months or less) and often provides a smaller daily benefit to offset the cost of care. These policies may be as small as $50 per day for three months.

Why should I consider it?

Traditional long term care insurance can be expensive leaving some families feeling like they have few options to plan for their future. Short term care offers an affordable solution to ensure a portion of your care needs are covered. It gives the family time to prepare financially in case care is needed for a longer period of time.  At the same time, you’re saving money by paying a lower annual rate each year.

Is there a trade-off?

Yes. Short term care policies generally last for 12 months or less and some individuals may need care for a few years. A lower daily allowance may not cover all of your needs if you require extra assistance from a home health aide, assisted living facility, or nursing home care. However, if traditional long term care insurance is too expensive, it’s better to have some coverage than none at all.

To recap, there’s no “one-size fits all” answer to planning for long term care. It’s important to consider your options and choose the plan that works best for you and your financial needs. Don’t navigate these waters alone. Speak with a long term care specialist who can assist you in researching your options.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.

Trade-Offs to Make Long Term Care More Affordable

There are a lot of aspects that affect the cost of a long term care insurance (LTCI) plan. Along with what features you actually apply for, your age, current health, relationship status, gender, and geographical location can all have an impact on the cost of LTCI.  We came up with a list of trade-offs to make long term care more affordable, strictly based on what benefits you apply for.

We have already determined that the “average” cost of LTCI can vary greatly, but for someone in their 50s the costs average between $100 and $180 per month.  This would typically be a policy with benefits around $4,500 per month, a 3 year duration and 3% compounding inflation.  Let’s take that “average” policy and adjust it a bit with some trade offs to make the price more affordable.

Short and Rich

One option would be to decrease your benefit duration from 3 years to 1-2 years, increase your monthly benefits to $7500 and select a future purchase option for your inflation.  Depending on the carrier, this would allow a smaller premium, but would still be a great option for coverage.

The Opposite of Short and Rich

Another option to reduce costs would be to increase your benefit duration from 3 years to 5 years, decrease your monthly benefits to $100 a month and keep your 3% compound.  While this policy may not be as rich, this could fulfill a “some is better than none” situation for people who just want a little extra help with costs.

There are other ways to save money on long term care insurance besides adjusting your benefits, as we have discussed in other posts.  Make sure to also compare companies, apply with a spouse or partner (if eligible), and apply while you’re healthy.  We also encourage you to play around with different benefits as we have outlined here using our Instant Quote Tool.  It is easy to use, there is no obligation, and it shops the top carriers in the industry.

LTC Consumer is an independent, free online service to help consumers understand what long term care insurance is, how it works, and how to evaluate coverage options. Our mission is to provide an educational, no-pressure resource for learning about long term care planning, with the opportunity to speak with specialists who can help them.