How To Pay Less In 2011 For Long-Term Care Insurance

Jan. 12, 2011 - PRLog -- You can pay $700 annually for a quality long-term care insurance policy.  You can also pay $7,000 a year.

A new report provides insights that can help individuals pay less for long term care insurance coverage. "People mistakenly believe that long-term care insurance costs thousands of dollars," states Jesse Slome, executive director of the American Association for Long-Term Care Insurance, the national trade organization that issued the report.

"A significant number of individuals today pay between $15 and $20 a week for this protection.  That's a highly affordable way to protect $150,000 to $250,000 of future care, he notes."
   
The organization analyzed data on some 200,000 new long-term care insurance buyers who purchased coverage over the past year.  Among buyers under age 61, over one-fourth (27.8%) paid less than $999-per-year.  What you pay for long-term care insurance is based on things you can control and factors you cannot change the report explains.  "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."

Age at the time of application plays an important role in determining the cost for long-term care insurance the Association study reports.  While 47.2 percent of buyers under age 61 pay between less than $30 a week
per-year, only 21.5 percent of buyers who are ages 61-to-75 pay within this range.  "The typical buyer today is in their 50s," Slome notes.  "That's when you can lock-in lower costs and more important qualify for significant health discounts that you don't lose when your health changes."

Fewer than one in 10 (6.8%) of buyers under age 61 paid $4,000 or more yearly for their insurance protection the AALTCI report indicates, while 15.6 percent of buyers between 61 and 75 paid this much.

Slome suggests five often overlooked tips that can help individuals significantly reduce the cost of insurance coverage.  For additional tips visit the Association's online Consumer Information Center http://www.aaltci.org/long-term-care-insurance/ .

1.  Leverage Your Good Health:  Insurers require that 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.  The percentage drops to 46% for ages 50-59 and only 38% for ages 60-69.  Once obtained, the preferred health discount is not lost when your health changes.

2.  Mind Your Birthday:  Rates for this insurance are age-based and priced to remain level.   Costs will increase each year you wait to apply, generally about eight percent annually for each year you delay. The new rate applies on your birthday.  Some insurers will accept the lower rate so long as the application is signed on your birthday but it's smartest to start the process about 60 days prior to an upcoming birthday.  

3.  Right-Size Your Coverage:   "Some long-term care insurance is always better than none," Slome notes.  Factor in other sources of income such as Social Security, pension and 401k 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.

4.  Compare Coverage:   Each insurer establishes it's own rates, health standards and available discounts.  As a result, virtually equal protection from two highly-rated insurers can vary by between 30 and 80 percent.   Ask your insurance professional if they have access to policies from just one or from multiple insurers.

5.  Check Insurer Ratings:  While some individuals start to use their long-term care insurance within a year or two of purchasing coverage, most will not need benefits for many years.  Therefore, it is vital to select a company with good ratings as you want to make certain they have the financial strength to be there when you ultimately need benefits.  A source of current ratings can be found at http://www.aaltci.org/long-term-care-insurance/learning-c....

Experts explain that if you are in perfect health and take no or few medications, you will not face problems obtaining this protection.  If you have a health condition or have had one in the past, the best way to reduce the cost of long-term care insurance is by working with a knowledgeable professional.  Make sure they shop the market to leverage your current and prior health conditions.

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Jesse Slome is executive director of the American Association for Long-Term Care Insurance http://www.aaltci.org the national trade organization. The Association's Consumer Information center was voted the #1 source for information by consumer interest group rating and can be accessed at http://www.aaltci.org/long-term-care-insurance .