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Inside this Article
How Can I
Save On Long-Term Care Insurance?
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Long term care
insurance can be confusing, no matter who you are,
especially if you don't know who to turn to for
expert advice. The good news is that the Long Term
Care Insurance National Advisory Center provides
the help you're looking for - easy LTCi policy
evaluation and comparison. Find your best options
right now.
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The tips below will help you
save money wisely, but don’t rely on price alone.
MOST
IMPORTANT
Because you may not collect for
decades to come, be sure to buy from a company that has been around for
some time and is financially stable. You may want to look up, from an
independent rating agency, the financial strength ratings of a company
you're considering.
GENERAL
GUIDELINE
Keep the premium for your long-term
care insurance policy to 7 percent of your income, or less.
For example, if your monthly income is $4,000, the long-term
care insurance premium should not be more than $280 per month.
(This is what the National Association of Insurance Commissioners
recommends in its Model Regulation for Long-Term Care Insurance.)
Another expert advises that the income to use in this calculation
isn’t your current income, but your expected income in
retirement, since that’s the income from which you’ll be
paying premiums for most of the policy’s existence.
Other ways of saving
Find out if long-term care
benefits are available through a group policy from your employer.
Employers might subsidize the cost, lowering what you must pay.
Check whether you can add long-term care
benefits as a rider on an existing life insurance or annuity policy.
These “combination” arrangements can save because the insurance
company gains operational savings that it can pass along to you.
Buy a policy with the longest waiting period you can
afford. For example, choosing a 90-day period instead of a 30-day period
can cut the premium by 30%. However, if you do need long-term care
services, you should save some money to pay these costs until the
waiting period ends.
If both spouses of a married couple are considering
buying long-term care policies, look into buying one joint policy
for both of you. Such a policy pays when either one needs care and can
pay for both, if necessary, up to its benefit limits.
If you’re still looking to trim the premium further,
consider buying a policy that will pay most, but not all, of the average
nursing home costs in your area. For example, if a nursing home room now
costs $120 per day, buy a policy that pays $100 per day. However, be
sure to buy an inflation-protection provision.
Check with several companies and agents, comparing
both benefits and costs. As with other types of insurance (and many
other purchases), comparison shopping can save you money. Just be sure
you’re comparing policies with similar provisions and companies with
comparable financial strength and service records.
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