Long-term care insurance premiums increase as you age, making it wiser to purchase early. Your marital status also has an effect on premiums.
Individuals with sufficient assets and income may be able to purchase policies to cover some of their future care costs; those without this luxury must rely on state assistance programs like Medicaid.
Age
As a rule of thumb, the older you are when applying for long term care insurance, the less likely you will be approved – insurers consider your age a key indicator in assessing whether or not they believe you’ll require long term care services in the near future.
As time passes, your premium will rise as insurers evaluate your current health and medical history to assess your increased risk for needing long term care services in the future, which necessitates paying more to cover this increased risk.
Consumer Reports advises people to purchase long term care insurance as early as possible, ideally before turning 60 years old. Doing so will result in reduced premiums and greater chances of approval for coverage.
According to the American Association for Long Term Care Insurance, most new long term care policies are purchased between 55 and 64. Younger customers may qualify for discounted rates depending on policy type and provider.
Waiting until after age 65 to purchase long term care insurance will increase its premium dramatically; for instance, waiting 10 years and purchasing at age 75 could increase it by 91%; waiting 20 years and purchasing at age 80 could bring another increase of 186.7.
Individuals unable to afford private long term care insurance policies may qualify for government-subsidized Medicaid coverage. These programs have stringent eligibility criteria that must be fulfilled, including spending down assets to the state-specific limit and meeting income limitations; applicants also must not be capable of meeting the costs for long term care themselves.
People unable to afford private long term care insurance should consider linked-benefit products, which combine life insurance and long term care rider/annuities. This product can be purchased by people between the ages of 30 and 85; most individuals purchasing this type of policy typically do so between 55-64.
Health
Long term care insurance provides individuals with protection of personal assets and savings against nursing home or assisted living costs, at-home care costs and adult day care services. Policies typically undergo medical underwriting – meaning the insurer reviews your medical history and may request physical exams prior to providing coverage – much like other forms of insurance like health or car policies have deductibles that must be satisfied before benefits can be distributed out to policy holders.
Before purchasing an insurance policy, always ensure the company has an excellent reputation and financial security. Check reviews online as well as message boards to determine whether any unresolved issues have surfaced. Many states have consumer protection laws which offer you additional protection should an inappropriate plan or company go bankrupt, but The Centers for Disease Control recommends shopping around for one that fits both your budget and needs.
Long term care insurance provides assistance with daily tasks like bathing, dressing and eating. Some policies also include more extensive care such as help with mobility and transfer as well as an individualized care plan. You have the choice between indemnity or reimbursement policies. Insurers also often offer “partnership” policies which enable recipients to qualify for Medicaid coverage should their long term care benefits run out and they need help.
As you consider what premium you can afford each month, taking into account both your age and expected policy rates can help ensure you purchase early may mean lower premiums in the future.
Some individuals may not qualify for long term care insurance at all, such as individuals with terminal illnesses and cognitive impairments. Others can purchase coverage if they possess sufficient liquid assets (e.g. proceeds from selling a home).
Assets
Many older adults cover their long term care costs through private funds such as personal savings, pension funds or other retirement plans, investments or the proceeds from selling their home. Others rely on family and friends’ contributions while still others depend on government funding to cover some or all of their long term care costs.
Long term care insurance provides protection from the rising cost of long term care in places like nursing homes and assisted living facilities, such as nursing home residency. Policies may be medically underwritten to qualify; applicants must fulfill certain health criteria in order to be approved before receiving benefits. Once approved, there may be a waiting period before receiving payments from their policy.
Typically, the longer an insured waits before starting to use benefits, the lower his or her premium will be. Policyholders may also choose an inflation rider that increases daily benefits progressively each year before commencing benefits use; note however, that inflation rate impacts annual premium costs directly.
Consumers considering long term care insurance should think carefully about their assets and future needs for long term care coverage, and seek professional advice about which type is the most suitable coverage. It may be beneficial to meet with a financial advisor for guidance in selecting an ideal plan.
Individuals with significant funds in their bank accounts, investment portfolios or real estate may consider purchasing long term care insurance to safeguard their hard-earned assets and use a reverse mortgage as a source of funds for long term care costs.
Individuals looking to avoid spending their assets on long term care costs or burdening loved ones with paying for care should consider purchasing long term care insurance through private insurers, group policies offered through workplace or trade organizations, or state programs like New York Partnership for Long Term Care.
Needs
Before making the decision to purchase long term care insurance, it is essential to assess your needs. Long term care insurance (LTCI) helps cover some of the expenses associated with long term care services that may be costly and not covered by Medicare or supplementary health policies. When weighing costs against premiums, insurance agents can assist in selecting coverage options best suited for both you and your budget.
Your eligibility for long term care insurance depends on both your age and health, with most insurers conducting an extensive medical underwriting process that includes physical examination and cognitive assessments to ascertain eligibility. Preexisting health conditions could disqualify you entirely or significantly raise premium costs; in order to secure the lowest premiums possible it’s wise to secure long term care coverage as early as possible in life.
Purchase of an insurance policy while young allows you to lock in an affordable rate that will remain constant throughout your lifetime, meaning premiums won’t keep rising year after year as they age. This can be particularly helpful for individuals without sufficient financial means to cover rising premiums over time.
Most insurance companies provide policies with different features and benefits. For instance, more comprehensive plans may offer inflation protection which automatically adjusts your benefit amount each year to keep up with increases in healthcare costs – something important for people concerned about long term care expenses and wanting to ensure that their coverage can keep pace with rising prices.
An LTCI agent should be able to tailor a plan that best meets both your individual needs and budget. They will ask about health history, as well as care you are likely to require in the future, before explaining all available policies’ costs and benefits.
