Long Term care insurance can protect you and your family from the financial burden of caring for a loved one, but it can be pricey. The good news is there are options to keep costs down. Here are six strategies to save.
1. Buy early. Ideally, you want to buy the policy at a time when you can get the most benefits for the lowest cost. Most experts agree that the best time to buy long-term care insurance is in your mid-fifties to age sixty, while you’re still healthy enough to qualify for better rates. Premiums are based on your age, so if you’re in this age group, you’ll save money if you buy before your next birthday.
According to the American Association for Long-Term Care Insurance, the cost of long-term care insurance for a 65-year old could be more than twice as much as the cost of insurance for a 55 year old. Because premiums are based on your age when insurance begins, those who buy early often end up paying the same cumulative premium, but for a much longer duration, than those who purchase at later ages.
2. Apply with your spouse or partner. Long-term care insurance companies offer discounts to married couples and domestic partners who live together. You could save up to 30% if you apply with your spouse or partner. Most carriers will give a partial discount even if only one of you is approved.
3. Consider shared care. Consider sharing a policy with your spouse. Typically in a shared policy, you are each buying a policy whose benefits can be pooled together. Couples can essentially double their potential coverage without individually having to purchase more coverage. Shared care can be valuable for any couple, but particularly in cases where there is a large age difference.
4. Choose your benefits wisely. If you can afford to pay for a few months of long term care, consider increasing the waiting period in exchange for lower premiums. Similarly, if you think you’ll be able to cover some costs out-of-pocket, consider lowering the daily maximum benefit. Finally, review the type of inflation protection the policy provides. If you believe your income and savings can cover the cost increases, eliminating inflation protection from your long-term care policy can cut the premium in half.
5. Plan ahead. Start to form a picture of your retirement. Costs for care vary greatly from region to region. Do you plan to stay where you are? By making your home more accessible, you may not need as much assistance as you age. Considering a move to a new location? Be sure to factor the relative costs of care into your decision. You can explore various costs across the country here.
6. Seek expert advice. For most of us, long term care insurance options can be quite complicated. Not only do available plans differ among insurance companies, but premiums for similar coverage can also vary dramatically. Your best bet is to work with a long-term care specialist who has relationships with multiple insurance companies and can customize a plan for you.