Factors Determining your Premiums

insurance-premium11Long term care insurance can be modified depending on a person’s need. Evidently, there is no generic price for policies. If you’re asking how much your premiums will likely cost, consider the following factors:

 

Age and Health

When you apply for long term care insurance at a younger age, your premiums will likely cost lower. Primarily because you’ll have a longer time to pay for your policy, say for at least 10-20 years.

Furthermore, when you apply young, you will likely apply with good health—possibly with no pre-existing conditions and that can lower the price of your premiums considerably. On the other hand, if you apply with underlying conditions, chances are your policy will cost more or worse, you can be declined.

 

Location

Long term care services can vary from state to state, and so does your premiums. Before you apply for a policy, determine where you will receive care and the cost of services in that area. Afterwards, you can match this with your desired coverage.

 

Options

Apart from these two factors, the main features of long term care insurance can influence your premiums. These are:

Type of Policy

Indemnity, reimbursement and partnership vary in how they pay off claims. Meanwhile, they also differ in cost. Which type you choose can have an effect on how much you will pay for premiums.

Benefit Period

This refers to how long your policy will pay off your claims. You can choose to be covered in a year or even for the rest of your lifetime. Your benefit period is parallel to the cost of your insurance plan, meaning, the longer you’ll get covered, the higher the premiums.

Daily Benefit

This is the maximum amount that your policy will pay for services on a daily basis. If your daily claims are high, your premiums are as well. In order to make this work for you, learn how much services cost in the state where you will receive care and use that as a basis for this benefit.

Elimination Period

How long you will wait before benefits start paying off is called the elimination or waiting period. During this time, you will have to shoulder any care expense you might incur. Elimination periods can last from a month to up to 90 days. A longer elimination period can decrease the cost of your premiums.

Inflation Protection

This feature acts like a safety shield for your benefits against possible rate increases in the years to come. If you don’t have an inflation protection, the cost of services may exceed your benefits and that would mean paying from your own nest. An inflation protection can add to your premiums, however, the amount that you pay for this feature is relatively smaller than the amount that you would have to shell out in the future if your policy does not have protection.

Long term care insurance premiums usually come at a hefty cost. A comforting thought is that you can make your policy work for your financial capability by studying and considering the components stated above.

 

Long Term Care Insurance Calculator

Some insurance providers have free tools to help you calculate how much your premiums would be depending on your choice of product, benefits, etc. For federal employees, you can visit FLTCIP’s Premium Calculator to check how much your premiums will be. For others, you can receive estimations of policies from different carriers by requesting free quotes here.

 

Sources:

http://www.eciagency.com/blog/factors_in_long-term_care_premiums.aspx

http://www.ltcoptions.com/long-term-care-insurance-costs/factors-determining-your-premiums/

http://www.insurance.ohio.gov/consumer/ocs/completeguides/complete_guide_ltcare.pdf

http://en.wikipedia.org/wiki/Long-term_care_insurance

 

 

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