While the features and benefits of today’s Long-Term Care Insurance have few noteworthy differences the premiums sure have big differences. A study conducted by the American Association for Long-Term Care Insurance (AALTCI), a national consumer education and advocacy group, reports that premiums for the same benefits can vary significantly.
An analysis by the AALTCI shows a 60-year old male obtaining new Long-Term Care Insurance coverage can purchase a plan for under $2000 a year. This coverage would provide almost $400,000 of tax-free benefits when the person reaches age 90. In addition, in most states with federal Long-Term Care Partnership plans in place, the person would have additional dollar-for-dollar asset protection equal to the amount of benefits paid by the policy.
Jesse Slome, director of the AALTCI, said they found a premium spread of over 100% from the top-rated insurance companies for the exact same type of protection.
"Once again, it reveals the importance of comparison shopping and working with a knowledgeable Long-Term Care Insurance specialist," Slome explained.
Married couples/partners usually have discounts available when they obtain coverage together. The AALTCI’s 2019 Price Index shows the average annual premium for a 60-year-old couple was $3,400. Many today purchase coverage in their 40s or 50s so they can take advantage of much lower premiums. Premiums are intended to remain level based on the age, health, and benefit level purchased at the time they apply for a policy.
“There are smart ways to protect yourself and save money," Slome explains. "For example, married couples should ask if a shared care option is available."
Shared Long-Term Care policies provide additional flexibility as one person can use the benefits of another. If one spouse pre-deceases their premium disappears but 100% of the unused inflated benefit goes to the other spouse/partner. Some companies use a third “shared pool of money”. Be sure to ask a specialist about the differences.
“Most of my clients find huge value and peace-of-mind obtaining long-term care coverage prior to retirement. This way they know they have a plan which will not only protect their savings and lifestyle but will reduce the tremendous stress and burden otherwise placed on their loved ones,” Said Matt McCann, a leading specialist in long-term care planning (www.mccannltc.net).
Without Long-Term Care Insurance, future extended care is either provided by a spouse or children. Caregiving is very hard both physically and mentally. Older spouses are just not able to provide care properly and adult children will have their own careers and families to contend with in addition to caring for a parent.
Paid professional and semi-professional care is expensive. The cost of this care is not paid for in most cases by health insurance or Medicare. This means care will drain your retirement savings and adversely impact both your income and lifestyle.
“People work hard and save money so they can enjoy retirement without worry. They want an affordable plan that gives them care option as well as protecting assets. They usually want to avoid a nursing home and have the ability to receive care in their own care. Couples love the idea of shared benefits. The concern is always cost and unfortunately, they often think Long-Term Care Insurance is too expensive. They are very happy when they find out these policies are very affordable,” explains Brent Donarski who runs MyLTCspecialist.com.
Since premiums can vary dramatically from one top company to another, experts suggest working with a specialist who works with the major companies. They can find the best coverage at the best value so you don’t spend more than what you need to. Most financial planners and general insurance agents don’t usually have the expertise or ability to do this.
It is rare for most people in their 40s, 50s, or 60s to not know a family member, neighbor, coworker or friend that has had an experience with long-term care. The U.S. Department of Health and Human Services says if you reach the age of 65 you will face a seven in ten chance of requiring some long-term care service before you die.
Start research before your retirement. Find the current costs of care services and the availability of partnership plans and tax incentives by finding your state on the LTC NEWS MAP. Click here. Find a qualified specialist by clicking here.
Since there are very few Long-Term Care Insurance specialists nationwide, most will help consumers nationwide. You don’t need a person locally and may not be available since the expertise is rare. The insurance company is not local either. What is important is their experience, knowledge of underwriting and claims, and their ability to shop the major insurance companies on your behalf.
Today’s Long-Term Care Insurance is easy, affordable, and rate stable. For many people, Long-Term Care Insurance is a key part of their overall retirement planning.