Report examines what people pay for long term care insurance protection
By Jesse Slome
American Association for Long-Term Care Insurance
Over a third (35.4 percent) of individuals with recently-purchased long term care insurance protection pay less than $1,499-per-year according to a new report issued today by the American Association for Long-Term Care Insurance the national trade organization. Among buyers under age 61, 43.5 percent pay less than $1,499 annually, whereas 73.6 percent of buyers between ages 61 and 75 pay $1,500 or more.
Individuals mistakenly have been led to believe that long-term care insurance costs thousands of dollars. A significant number of individuals today pay between $10 and $20 a week. That's a highly affordable way to protect $150,000 to $250,000 of future care.
We analyzed data on some 93,500 new long term care insurance buyers. Among buyers under age 61, over one-fourth (28.1 percent) paid less than $999-per-year. Meanwhile, fewer than one in 10 (9.3 percent) pay $3,500 or more annually. What you pay for long term care insurance is based on things you can control and factors you can not change. You can control and make protection highly affordable by comparing coverage, by taking advantage of discounts and by looking at newer options that were not available a few years ago.
Of course, age at the time of application plays an important role in determining the cost for long-term care insurance. While 41.5 percent of buyers under age 61 pay between $500 and $1,499-per-year, only 20.8 percent of buyers who are ages 61-to-75 pay within this range. The typical buyer today is in their 50s. That's when you can lock-in lower costs and, more importantly, qualify for significant health discounts that you don't lose when your health changes.
Nearly one in 10 (9.5 percent) of all buyers paid $4,000 or more yearly for their insurance protection. Only six percent of buyers under age 61 pay this much, while 28.2 percent of buyers age 76 or older did.
Finally, here are three tips The American Association for Long-Term Care Insurance suggests that can help consumers significantly reduce the cost of insurance coverage.
Three Tips For Saving Money When Buying Long-Term Care Insurance
The American Association for Long-Term Care Insurance suggests the following tips that can help you significantly reduce the cost of insurance coverage.
1. Leverage your good health: Insurers will require you meet certain health qualifications to obtain coverage. Discounts are provided to those in good health and 62 percent of applicants between ages 40-49 qualified in 2009. The percentage drops to 46 percent for ages 50-59 and only 38 percent for ages 60-69. Once obtained, the preferred health discount is not lost when your health changes.
2. Right-size your coverage: Some long term care insurance is always better than none. Factor in other sources of income such as Social Security, pension and 401(k) plans that can pay costs and allow you to add money-saving options such as a 90-day deductible (elimination period) or consider a limited-pay plan with a shared care option that allows two spouses to share a common benefit pool.
3. Compare coverage: Each insurer establishes its own rates, health standards and available discounts. As a result, virtually equal protection from two highly-rated insurers can vary by between 30 percent and 80 percent. Ask your insurance professional if they have access to policies from just one or from multiple insurers.
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