Being a holder of long term care insurance is an infallible way of getting covered against long term care expenses. Though of utmost importance, a huge chunk of the population are still shying away from the very concept of this policy because they associate it with soaring premiums. That’s not always the case. In fact the cost of long term care insurance can be lessened in order to fit your budget.
Having a policy at your disposal is very important. This fact has been stressed time and time again by financial and insurance experts alike. Why? Because long term care services can come at hefty prices and they are continually on the rise. Truth is, by 2030, current rates are expected to quadruple. Choosing to self-insure with your $500,000 nest will not be enough to cover your care requirements beyond a year.
Think about it this way. In the years to come, cost of long term care will be at $608 daily for in-home care and $386,900 yearly for a private room inside a nursing home. That’s what the price tags will look like when current rates have grown four times. We all know that’s not a distant possibility as it is estimated and expected to take place. Now, will your retirement nest be able to handle that?
In order to avert the impact of these huge figures against your finances, then you better begin the process of buying a policy now. Here are some ways on how you can reduce the cost of long term care insurance:
1. Do the necessary preparations
Do your home work and shop around. Familiarize yourself with the different companies that sell this kind of policy. You can narrow down your choices by looking into their profiles, track records, claims payment history and customer satisfaction ratings. Examine their policies and rates thoroughly. Prices for the same plan can have a difference of 60-90%. Acquire the best deal by taking time when shopping around and comparing policies.
2. Include a rider against inflation
Your policy’s maximum benefit is parallel to how much you will pay for premiums. Instead of going for a high maximum benefit, it is advisable that you pay more attention to getting your policy protected against inflation. Having this rider ensures that your benefits will keep up with the increases in care costs. If you buy purchased at the age of 40, your policy’s benefits would be double the initial amount by the time you reach 54 or 60.
3. Increase the elimination period
Another way to save on premiums is by going for a longer elimination period. If you are not at risk for a high level of care, you can go for a waiting period amounting to even 180 days. Remember that your initial care expenses will be relatively low. Think of it as saving your coverage for care requirements that are more advanced and expensive. In addition, increasing this period can make your benefits last longer.
The cost of long term care insurance is not as crippling as most people think. What’s financially catastrophic is facing the need of long term care uninsured. Keep in mind that your premiums are actually dependent on you and it can be set to an amount that’s friendly to your budget.