Options to Make Long-Term Care Insurance Even More Affordable Now

Despite the perception that Long-Term Care Insurance is expensive, the reality is policies are very affordable for most people and is custom designed. With an LTC policy, you have access to your choice of quality care options, including in-home care allowing you to protect assets and ease family burden.

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Options to Make Long-Term Care Insurance Even More Affordable Now
7 Min Read February 20th, 2019 Updated:January 11th, 2022

Aging and future long-term care are family issues that impact all generations of family members. Surveys show most people over age 40 understand the need to plan for future long-term health care costs. We start noticing our health start to change once we get into our 40s. The same for our bodies; they are not the same as they were when we were in our 20s. Unfortunately, dementia affects many people, especially in our 70s and 80s, and those cognitive changes can start much soon than that.

However, many people avoid pursuing a Long-Term Care Insurance policy because they think it is too expensive. The costs of long-term health care are indeed rising rapidly nationwide. However, Long-Term Care Insurance remains affordable for many people, especially those in their 50s who still have good health. Plus, LTC Insurance is custom-designed, giving you control over the benefit levels and the premium. 

No question, long-term health care is costly and gets more expensive every year. While most long-term health care is delivered at home or in an assisted living facility, those costs are not cheap. These long-term care services get more expensive yearly due to increased demand and higher labor costs. 

But nursing homes remain very expensive. The LTC NEWS Cost of Care Calculator shows nursing home costs nationally average over $100,000 a year.

Long-Term Care Insurance Cost: Affordable and Custom Designed

Facts are facts. Long-Term Care Insurance can be a very affordable way to address the financial costs and burdens of aging, at least for most people depending on your age and health when you obtain coverage.

These policies are custom designed, and the director of the American Association for Long-Term Care Insurance says there can be smarter ways to purchase these crucial policies.

“By smarter, I mean saving money and having some insurance protection in place because some protection is always going to be better than having none.”

Jesse Slome, Director of the AALTCI, a national consumer advocacy and education group.

Long-Term Care Insurance is custom designed. There are several ways to devise a plan to fit almost any budget. Slome says one way to is with inflation protection. Typically, a person would purchase 3% compound inflation - meaning your benefits increase each year, not your premium, by 3%.

Inflation Options Can Be Adjusted for Affordability

Slome recommends considering using 2% instead of 3%.

“Inflation’s been tame for the past decade and of course no one can predict the future but even if you have to supplement future care costs from your Social security or retirement assets, that’s going to be doable. And, if inflation increases, well then so typically does the value of your assets and the income one earns from CDs and bonds.”

Jesse Slome 

Partnership LTC Insurance Provides Dollar-for-Dollar Asset Protection

Keep in mind some states require 3% compound inflation to qualify for their Long-Term Care Partnership Program. The program provides consumers who own a partnership-certified policy additional dollar-for-dollar asset protection or 'asset-disregard.' 

One way to save money is to reduce your monthly or daily benefit or the initial policy limit to compensate for the cost of inflation. The importance of the partnership program should not be ignored. 

A partnership policy might be one of the biggest kept secrets in retirement planning. With one of these unique policies, you can provide a legacy no matter what happens to you.

Shared Spousal Benefits Provide Flexibility and Affordability

Another option Slome mentions are shared spousal benefits, which many companies offer.

“This is an incredible benefit not offered by every insurance company but for a couple, I think it’s the best-kept secret today.”

Jesse Slome 

“With the shared care option, if one spouse exhausts their benefits, they can tap or access the benefits available in the other spouse’s benefit pool. That’s an incredible planning tool for couples.“

Jesse Slome

This allows a consumer to purchase two smaller plans and connect them. This can provide outstanding value at a lower cost.

“Many of my clients select shared benefit options. They see incredible value in both the lower cost and the asset protection provided by these plans.”

Brent Donarski, a 30-year veteran specialist in long-term care planning

"My clients are usually very surprised at how affordable today's Long-Term Care Insurance really is. They know they don't want the responsibility of caregiving to be placed on their children. They desire to protect their savings and lifestyle while knowing they will have the resources to choose quality care when they need it. When they see how affordable LTC insurance really is, it becomes a common-sense decision to get it in place."

Brent Donarski 

Long-Term Care Insurance Works for Families

American families are benefiting from these insurance policies. In 2021, over $12.3 Billion in Long-Term Care Insurance benefits were paid to American families. Thusly, these families had the resources to pay for quality care at home or in a facility without draining savings or forcing family members to be caregivers.

Slome says every insurance company has its own pricing and specific policy features.

“This is a case where you really benefit from working with a knowledgeable specialist, someone appointed with multiple long-term care insurance companies.”

Jesse Slome

Research Tools

Since these plans are custom-designed, you should first research the cost of care where you live or where you expect to live once you retire. 

The LTC NEWS Cost of Care Calculator shows you long-term care services' current and future costs. It will also indicate available tax incentives and the availability of partnership plans in your state.

Be sure to get the help of an experienced Long-Term Care Insurance specialist. Most insurance agents and financial planners are not prepared to provide you with correct information and accurate quotes. They also tend to work with only one or two insurance companies. 

Remember, every insurance company must file and get approved their products and pricing with each state's insurance department. No individual insurance agent, agency, or advisor can give you special deals. However, premiums do vary over 100% between insurance companies for the same benefits.

A Long-Term Care Insurance specialist can match your age, health, and family history with the insurance company that offers you the best coverage at the best value.

Long-Term Care Planning Means More Than Money

The problem of future long-term care is both a cash flow issue and a family issue. Most experts suggest purchasing a policy before retirement when you enjoy better health. In fact, most of those buying LTC Insurance are in their 50s.

Premiums are based, in part, on your age at application, the amount of benefits you wish to have, and your health. Several types of policies are available in most states. These include traditional policies (including partnership certified policies), asset-based policies that offer death benefits, and short-duration plans.

The problem of long-term care planning is it is really about family. The need for extended care can impact multiple generations at the same time. Family caregivers are affected physically, emotionally, and even financially. 

The role of a caregiver adversely affects careers, families, and even the caregivers' health. Your children may tell you now that they will be your caregiver when you're older. They are usually unaware that being a caregiver is physically and emotionally demanding. Give your loved ones time to be family instead of having to juggle their careers and families with the role of being a caregiver.

Most surveys show most people who rather not burden their adult children. People don't want to place the full responsibility of caregiving or managing future care on their families. Long-Term Care Insurance gives you access to your choice of quality care options, including in-home care. You not only safeguard your assets, but you ease the stress and anxiety otherwise placed on your family.

Planning with affordable Long-Term Care Insurance will make getting older easier on those you love. However, LTC Insurance is medically underwritten, so be sure to start your planning when you are younger and healthier, ideally in your 40s or 50s. 

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About the Author

An LTC News author focusing on long-term care and aging.

LTC News Contributor James Kelly

James Kelly

Contributor since August 21st, 2017

Editor's Note

People require long-term health care due to changes in their health, body, and mind. Whether you become ill, have mobility problems, or have other aging issues, being prepared will reduce the stress and anxiety placed on family members and give you peace of mind to enjoy your future retirement.

Family caregivers face physical and emotional challenges they must deal with as they juggle their work and family responsibilities along with being a caregiver.

Professional care services are expensive and adversely impact income, assets, lifestyle, and legacy. The costs are expected to climb even higher in the decades ahead, placing tremendous financial pressure on American families. 

Start researching your coverage options before retirement. Most people purchase coverage in their 50s—the earlier, the better to save money and take advantage of good health discounts.

Available Resources on LTC NEWS

LTC NEWS offers several tools and resources to help you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis. 

To help you plan for the future costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.

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