If you are thinking about purchasing long-term care insurance protection for yourself or a loved one, it’s likely that one of the foremost questions on your mind is “how much will it cost?”
This article is intended to provide some general information and suggest a two ways that you can make this protection far more affordable than you might think.
Take Advantage of Insurer “Sweet Spots”
The sweet spot on a tennis racket or golf club is the location where you get the most power from your stroke. With long-term care insurance, the sweet spot is where you get the most protection for the least cost.
Finding the sweet spot is especially important when you look for long-term care insurance. That’s because your cost is generally set for the life of the policy (though this is not a guarantee). And, because it almost never pays to change policies or insurers down the road. Policy costs are based on your age when you apply and your health.
So, you want the best cost for the best protection from the get-go.
Each insurer sets their own rates based on the type of clients they seek to attract. The company with the lowest cost for a 55-year-old married couple, may not be the least expensive for a 55-year-old single individual or, for that matter, a 64-year-old married couple. For example, a recent comparison of rates from four insurers (Genworth, John Hancock, New York Life and Northwestern Mutual) for a 55-year-old found that virtually-identical coverage from Northwestern would cost almost $1,000 a year more.
There are two kinds of insurance professionals who offer long-term care insurance. Agents generally represent only one company (which may indeed have the best offering). Brokers typically are independent and can represent multiple carriers. They can shop the market.
An important question to ask whoever you contant is whether they will be comparing policies and how many they are looking at before recommending a solution.
Your Good Health Today Can Save You 10% to 20% Each Year
Drivers without accidents and tickets pay less for their auto insurance. Individuals with few or no current health conditions pay less for their long-term care insurance. Insurers generally offer a 10% deduction.
And, best of all, this good health (some call it preferred health) discount is locked in. That means, you don’t lose the savings when your health changes. And, as you get older, it will change.
A study conducted by the long-term care insurance industry’s trade organization in 2008 revealed the percentage of applicants who qualify for good health discounts. It’s clearly to your benefit to start the process at younger ages, certainly while in your 50s.
Percentage of Applicants Who Qualify for Good Health Discount
Age of Applicant Average Who Qualify
Under 30 63.2%
30 to 39 66.3%
40 to 49 66.8%
50 to 59 51.5%
60 to 69 42.2%
70 to 79 24.2%
80 and Over 12.9%
Bottom line, an educated consumer always has an advantage when buying any financial product. Long-term care insurance is offered by between 40,000 and 50,000 insurance agents, financial planners and stock brokers. They should be willing to provide cost comparisons and explain ways you can save without any obligation. After all, it’s in your best interest… and theirs.
To find a comprehensive online directory of over 3,000 insurance professionals who can assist with your long-term care insurance needs, visit the Consumer Information Center of the American Association for Long-Term Care Insurance.
About the author
Jesse Slome is Executive Director of the American Association for Long-Term Care Insurance. The industry trade organization does not sell insurance products but maintains an excellent website for consumers seeking additional information on the subject. If you would like to receive a no-obligation free quote from a member of the Association, visit our Consumer Information Center.