Some of the exclusive ways of saving expenses on Long Term Care Insurance premiums
Some of the exclusive ways of saving expenses on Long Term Care Insurance premiums
Long term care insurance is expensive to afford by many, but indeed most people have the requirement for it. However, this article lets you know about the different ways, by which you will be able to cut down your expenses on these insurance premiums. These ways are like purchasing such insurance much earlier, saving money through your better health discounts, group policy options and couple concessions, tax subtractions, stretching elimination period, opting for smaller plans, yearly premium payouts etc.
A Long Term Care Insurance offers lots of benefits and provides coverage for most of the long term care services required by a human being. Therefore it is very much important to avail such an insurance policy. Many people find it difficult to afford long term care insurance, as because it is costlier than other types of insurance policies. Generally the yearly premium amount of a standard long term care policy ranges from $1,000 to $3,000. However, it is better to pay such a fixed amount (as premiums) every year and remain secured, rather than compromising with the capricious and the huge expenses of long term care, that may crop up any moment. Fortunately there are some exclusive ways by which people can cut down their expenses on the long term care insurance premiums. So let's get to know about them.
I. Make an Early Purchase of the Insurance policy
It is always advisable to make an early purchase of a long term care insurance policy. The rate of premiums is set depending upon the age. In case you would buy a long term care policy that is secured against inflation, then the collective prices of the premiums is destined to go down the earlier you make a purchase for it. It must be remembered that you cannot save money on the premiums of the policy if you keep holding on. This is because with the passing of time and age, the premiums of every long term care insurance policy increases considerably. So this means if you purchase a long term care policy much beforehand, you will save much of your expenditure on the net prices on the premiums.
An illustration that makes you think that why you should purchase a long term care policy as early as possible
If you decide to hold on and expect to save your expenditure by this way, then you are absolutely wrong in your thinking. By holding on you do not save anything but cut off your benefits at the same time. For instance let us consider a long term care insurance (which had composite inflation security) that offers a daily sum of $200 for a time period of 4 years. Then by depending on this type of policy conditions, it has been calculated that if you purchase such a policy at the age of 55 years and pay for it a total premium of $46,710 till you attain the age of 85 years, then you will be able to receive a total benefit of $1,201,912 by the time you reach 85 years of age. However, if you decide to wait and purchase the policy when your age is 60 years, then you will have to pay a total amount of premium of $48,275 till you attain the age of 85 years. But in this case you will be paid a benefit of $941,729. Similarly, if you wish to wait further and purchase the policy at the age of 65 years, then you will have to pay a total amount of premium of $51,600 till you attain the age of 85 years. In this case you will be paid a benefit of $737,869 only.
This means, the more you hold on and purchase a long term care policy lately, the higher amount of premium you will have to pay and the lesser amount of benefits you will have to receive. So purchase long term care insurance as early as possible.
Stay secured and receive more benefits buy making an early purchase of long term care insurance
Generally the health of an average person is found to degenerate with his age. This means that a healthy person of the age of 55 years cannot expect to have the same health status by the time he reaches the age of 75 years. However exception does occur. Many people are even found to stay healthy by the time they attain 85 years of age. But this is not the case with every one. We are thus assuming the general cases. So if we consider all of these things, then it can be concluded that it is always better to adopt preventive measures to fight against long term care. So better buy long term care insurance as early as possible. With this you will be able to save money on the premiums, gain more benefits and also stay secured. Such insurance will act as a protective weapon for you when you will need long term care.
II. Better Health Concessions
Your personal medical history and records can cast an influence on the long term care insurance premiums by a rate of up to 150%. Thus, if you are absolutely healthy and devoid of any medical disorders, then it can offer to buy in advance in order to protect beneficial tariff for you. Thus if you have a good health condition you may be eligible to get concessions on the premiums that you have to pay every month for owning the long term care insurance. Alternatively, if you are found to have a severe health disorder, then it is sorry to say that hardly any insurance policy will be available for you.
III. Concessions for couples
There is good news for those who are married. A yearly concession of 10%-35% of interest on the premiums of long term care insurance is offered to married couples. The most amazing thing is that this concession is also applicable to those couples, who are unmarried but living together. Even those, who have the relation of brothers and sisters in between them, can also enjoy these couple concessions.
IV. Subtraction of taxes
As per the policies which are designated as tax-qualified, the long term care insurance premiums are regarded as medical charges under the existing regulations of IRS. In case your total expenditure for medical services surpasses 7.5% of your regulated net earnings, then you can cancel the surplus amount as a listed subtraction mentioned as per Schedule A.
Extra Subtraction of taxes
In case you are a single owner, associate or LLC holder, then you will have the advantage of subtracting all the premiums (that you were supposed to pay) for a competent long term care insurance, no matter you list them or not.
V. Group Concessions
There are many companies that offer group long term care policies. So if you are employed in any company, enquire for the availability of such facilities in your workplace. If such offers are available in the company you work, then you will be able to obtain long term care insurance under group concessions. This is possible because the employer makes a bulk purchase of such policies for all its employees and also pays a part of the money from his own pocket. Employees are thus able to avail group long term care policies under 10% to 15% concessions on the premiums. They are thus able to save a lot of their expenses on the insurance premiums. However, keep in mind that most of the group long term care insurance is now available with considerably minimized benefits or with non-standard eligibility conditions. So you may get them under pretty good concessions but you may not avail all the required long term care benefits.
VI. Pattern of the policy- smaller schemes
Choosing an insurance policy that listens to your requirements is one of the best ways to save money on premiums. Be sure to look after and set the pattern and arrangement of your plan before purchasing it. You can choose to go for coinsurance option for a portion of the expenses incurred for your long term care services. This will allow you to minimize your premium amounts to an extent. For example, if you reduce your daily benefit by a rate of 20 percent, then you can expect to receive a 20 percent reduced premium. If you choose a 4 year insurance plan more willingly than a 6 year plan, then every year you will be able to minimize your expenditure by a rate of 15%-30%.
VII. Pattern of the policy based on Longer Elimination Period
Basically the Elimination Period is regarded as a deductible for long term care insurance policy. Elimination period is the total time in which you pay money from your side, sooner than the insurance plan commences paying you the benefits. You have the permission to pay this from your subsidiary resources like Medicare or any other healthcare policy, if you have. You will be able to save 10%-15% on the premiums every year if you lengthen the elimination period from 0-90 days.
VIII. Yearly Premium Disbursements
It is advised that you payout the entire amount of money from your pocket on the anniversary date, for paying the long term care insurance premiums. If you do this you will get to save about 8% on the premiums every year. If you think that you will forget making the overall payment on the aforesaid time, then you will not have to bother about this. Your insurance company will send you a notification much earlier than the date and make you remind for paying your insurance premiums on the specified date.
However, you can freely ask for the assistance of any insurance representative. He/she will assist you to search for a long term care policy that suites your requirements and whose premiums will not affect your budget and lifestyle. You can also find a policy with their help that will also go by your age and health conditions. You can also consult with the insurance representative to find out more innovative ways of saving your money on the premiums.
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