Simple Ways to Save for Long Term Care Costs
Are you entering the retirement phase? Troubled with having to face circumstances that deal with health and assistance? Purchasing an insurance policy (LTCI) is the best option to answer your future long term care needs. However, it is important that you shop wisely in order to receive the best coverage and the highest benefits at the most affordable rates. Also, you should consider that long term care costs by state vary. Several factors (such as local health conditions, pollution, etc.) are reasons why prices vary by location. Regardless of area, having a plan to ensure coverage (and other needs) is best to avoid any unwanted problems that you may encounter in the future.
Why Should You Purchase Long Term Care Insurance?
Genworth Financial is one of the leading financial security companies in the United States. The company recently conducted an annual Cost of Care Survey to determine expenses related to long term care in America. Their survey shows that the national median annual cost of a private room in a nursing home is $92,378 or $253 per day this year. In just five years, the cost has risen by about 3.51% per annum. With increasing costs and other expenses to consider, it is highly suggested to consider purchasing long term care insurance. Additionally, insurance for long term care will also protect your children or other family members and minimize any burden on them. An LTCI will cover the cost of your long term care when you are older or if something unexpected happens like an accident or a medical condition that will prevent you from taking care of yourself.
How Do You Reduce Long Term Care Costs?
An important factor that you should know about long term care insurance policies is that plans differ from each other. Discounts and savings options provided by insurance companies also vary. If you want to save, you will need to compare each long term care insurance policy available in the market. Better yet, talk to an LTC professional who can match your situation to the insurance company offering the best value for your money. Your LTC specialist can discuss with you the different factors that affect your insurance premiums and other components like the Daily Benefit Amount, Waiting Period, and Inflation Protection.
The daily benefit refers to the maximum amount that the insurance policy will pay for each day of care received. You can get a policy that will pay for $100-$500 a day or even an unlimited coverage, which means that if you need care for five years, it will pay for the entire duration. Just remember that the lower the daily benefit is, the lower your LTCI premium will be. As such, make sure to consider various aspects in your lifestyle (or possible health factors) that may be relevant with your future spending. You would want to have an amount that will best satisfy with your costs – too little and you may need other sources of income; too much and it’s as if you’ve just wasted paying for premiums.
The waiting period refers to the time between making a claim and the actual payment of it. During this period, any expenses that should occur will be covered by the policyholder. Although it may seem to be a hazard for individuals aiming to stick to a budget, this duration of time does have its perks. Waiting periods usually last up to 90 days, with specific cases for policyholders to request for a longer term. The main reason why some would opt for more days in a term is that a longer period of wait can result to lower premiums to pay. Regardless of the length of the time span, make sure to check if you have enough funds to last during the waiting period.
Lastly, inflation protection is an option that you can choose to include in your long term care costs plan. This option increases the policy’s daily benefit amount during the policy term in order to keep up with inflation. Although this particular option will increase a policy’s premium, having protection from the rising dollar is needed to make sure you’ll get the care you deserve in the future.
Dealing with Long Term Care Cost by State
Moreover, long term care insurance rates vary from one state to another. What they offer in Nevada may be different in Florida or Colorado. Aside from the tips mentioned above, make sure to seek advice from LTC experts on whether there are local support groups and programs to help lessen LTC costs. One key strategy to consider would be LTCI partnership policies. State partnership programs are currently being pushed in several locations in the country. These programs will allow beneficiaries to be able to purchase LTCI plans by using Medicaid resources. Additionally, policyholders will be able to receive Medicaid benefits without going through asset and estate loss. Please make sure to confirm with an LTCI expert to check if your state has a partnership program set.
For more savings, get your long term care insurance quotes online. Usually, you can get the information free of charge. You can easily compare pricing, rates, features, and benefits of each private carrier and select the policy that best fits your needs.
Do you have other suggestions on how to save for long term care costs? Feel free to share it with us below.