LTC Discounts
Most of us want to make our purchases at discounted prices. The purchase of Long Term Care insurance is no different; everyone is looking for a bargain. To obtain the coverage best suited to your situation, the following factors should be considered
- Premium: Should be 7% or less of income.
- Assets: More than 2 years’ nursing home cost.
- Age: Under 85 to be considered for a policy.
- Health: Problems may disqualify coverage.
If these are within range you should look into Long Term Care insurance even if you have substantial assets, assets that are adequate to “self-insure” extended nursing home or convalescent care expense. This is true because the Long Term Care insurance premium, if it includes a refund provision, will be returned to the estate if the benefits are not used, making the cost of Long Term Care insurance not the premium that was paid, but just the interest that the premium might have earned if it had been invested.
Assuming you are still looking for premiums to compare, you should use the premium calculation tool in the “Illustrations” section to help you compare policies with equal benefits. While no two policies will be exactly the same, it is important to compare equivalent benefits, not choose between different policies from different carriers. If you prefer one benefit provision in one design, attempt to include it in all other policy illustrations to make a fair comparison possible.
Discounts may be available from associations and/or from insurance companies who offer discounts if two people (may be husband and wife, or could be just friends) apply together. Additional discounts are given to non-smokers, to those in better than average health, and to those who pay annual premiums.
Additional cost savings may be found in the National Long Term Care Partnership. This became law as part of the Deficit Reduction Act of 2005 passed in February 2006. Under this law the state Medicaid plan is combined with private Long Term Care insurance to shelter additional assets from confiscation to pay for extended nursing home or convalescent care expenses. Four states (California, Connecticut, Indiana, and New York) have had such programs for years. Now the remaining states have federal guidelines to follow in designing their own Long Term Care Partnership programs.
With programs similar to the Partnership for Long Term Care in California, all areas of the country will soon be able to offer this innovative asset protection program.
Some are even going further and using the equity value they’ve built up in their homes to pay for Long Term Care, asset replacement life insurance, and other ways to pass their assets to future generations. A Reverse Mortgage may provide the answer to these needs as well as to those who have discovered that their fixed retirement income is no longer adequate to maintain their desired lifestyle.
