6 Questions to Ask on Long Term Care Insurance
Are all long-term care (LTC) policies priced equally?
Are all long-term care (LTC) policies priced equally?
Certainly not and that’s one of the key reasons why it’s required to talk to an expert LTC insurance professional. Every year, American Association for Long-Term Care Insurance publishes a Price Index where LTC costs can be compared for virtually similar coverage.
For an individual at 55, the median cost for coverage (150 USD per day benefit for 3 years benefit period) would be 1720 USD being 1428 USD the low price and 2552 USD the high one. The range was almost 90 percent to 100 percent different at the older ages.
Unlike other types of insurance, here is the freedom to switch insurance providers from one year to another; usually people purchase LTC only once. And that’s why it’s important to ask an insurance professional if they can compare coverage.
However, it can be always asked for a free and no-obligation cost comparison by calling the association or clicking on the particular link on their official website.
What would be the best age to start LTC planning?
Between ages 52 and 64 would be the perfect time for buying LTC. The sweet spot is between mid-50s and mid-60s – to be more precise, before 64 as once someone becomes eligible for Medicare, chances are there that they’ll take advantages of every free preventive health examinations they provide.
Such exams are really great. But if the physician finds any condition, it can prevent the interested policy buyer from health qualifying for LTC insurance – irrespective of how much they’re keen to pay.
And while most of the LTC claims start generally at older ages, one must not forget that younger people can get illnesses such as Parkinson’s and MS in their 50s and even in 40s, and that may require them to get care for years. So this is something to think about.
What are resources to getting tips on reducing the cost of long-term care insurance?
There are a number of great tips that could be found in Association’s issues of Kiplinger’s Personal Finance journal. Click the specific links to access them.
I want to become smarter – are the secrets required to be shared before I meet an agent?
We all are smarter with the widespread of Internet. Every insurance provider has at least one or more sweet spots usually based on which health conditions and ages they think are most apt and desirable depending on their experience or expectations. Some offer good discounts for the couples purchasing LTC together while others offer discounts even when only one spouse buys.
Most well-versed LTC insurance professionals have definite access to different LTC policies from different insurance providers and they can show an apple-to-apple comparison without learning any rocket science. The savings the policy buyer can get could be really notable.
Here are some questions to ask…
- How many long-term care insurance policies can someone trade? One or several? And if several, then which carriers has he dealt with?
- How many policies does he sell every year? Are they a specialist or just a dabbler?
- Has he ever got clients go on claim?
Such questions will give a good idea of if they’ve been doing this for one year or for many years.
I’m married and 57, how much would my LTC cost?
The amount has to be paid is purely determined by the health, age and the amount of protection people choose at the time of application. But the purchaser should have a bottom line.
Association executes a Price Index study each year and a couple both of age 55 and qualifies for preferred health as well as spousal discounts may need to pay 2702 USD every year – combined rate for both the spouses. That’s for what LTC is known as a base plan of protection. That’s almost 165,000 USD in existing benefits for each of the spouses through shared care option is included so one spouse may tap the others’ policy benefits. Inflation protection coverage is also included to the plan and that will grow over time.
However, the cost can differ from one provider to another. And that’s why it’s crucial to ask individual insurance consultant if he/she can compare coverage. Dealing with someone who is specialized in LTC business would also work.
It is always better to ask for a free and no-obligation cost comparison by calling the Association or clicking the specific link on their official website.
I’ve heard about rate increment. Is this something to be concerned about?
It’s difficult to give an explained yet complex answer in just a couple of words. The policies people read about in different news stories usually were issued 10 to 15 years back when long-term care was relatively new and policy pricing were entirely different.
Here’s an example of what has changed. Interest rates given on an investment used to be around 10 percent in 1985 and around 7 percent in 1995. LTC insurance is extremely interest-rate sensitive. So declining rate of interest is good for, especially when someone is looking for refinancing his mortgage but miserable for long-term care policies with the older ones.
But time has changed a lot. Policies issued these days in different American states are strictly monitored by new regulations by the National Association of Insurance Commissioners and accepted by most states. Such regulations make it compulsory that the insurance policies get priced fairly and perfectly depending on everything that has been learned.
So, when none can foresee the future, there are many safeguards to provide protection today. Moreover, there’s a cumulative experience that has been derived along the way.
How do new LTC partnership plans vary from other LTC insurance plans?
Almost 40 American states have adopted LTC insurance partnership plans and the others will surely do the same. One can expect to see a fuller explanation of the notable benefits of these plans. However, they’re basically the same LTC policies – just a new and improved version – with a special benefit; the state-sponsored additional asset protection.
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