The American Association for Long-Term Care Insurance reported this month the results of a study that analyzed the cost of long-term care insurance for typical purchasers. Most people under age 61 pay from $500 to $1500 a year, much less than what many people think such insurance will cost. That works out to less than $20 a week for most wage-earners, said AALTCI executive director Jesse Slome.
The report also provide tips about how to further reduce the cost of premiums, including trying to qualify for a preferred health discount, selecting a 90-day elimination period, chooses a spousal “share-care” option, and shopping around among carriers for the best coverage at the most affordable rate.
It might be easy to dismiss this study as self-interested, since the AALTCI, according to its web site serves “those who offer long-term care insurance and other planning solutions.” In addition, the timing is suspicious, the report arriving just months after passage of the CLASS Act, the part of the federal government’s healthcare reform package that will create a voluntary government-run long-term care insurance program. Average premiums under that program are estimated to start at $100 to $240 a month ($1200 to $2880 a year) and pay out a mere $50 to $75 a day – too much for too little, some critics have said.
Nevertheless, this report may be an indication that the LTC industry is working swiftly to get ahead of the government program by creating highly competitive long-term care products. And if there is going to be an LTC price war, now might be the time – no matter what your age – to purchase coverage.
As we frequently note in this blog, LTC coverage is about the only option for people who must pay for in-home or assisted living care when they are ill or aged. Work with a reputable agent who can find you the right policy with a well-capitalized carrier. Research what care cost will be by the time you could need it, and plan accordingly. Although in the end you may have to fight with your carrier to receive benefits, it’s better to have that option than none at all.
To examine the report go to http://www.aaltci.org/news/long-term-care-association-news/report-what-people-pay-for-ltc-health-insurance.