How Much is Long Term Care Insurance and Who Needs it

Many people often wonder how much is long term care insurance and who needs it. The fact is, paying for your own long-term care services can be very costly.  The average cost of a nursing home stay is $76,000+ a year and it can run much higher in major metropolitan areas.  Care in your own home or in the home of a relative can be almost as expensive. Skilled nursing care averages $224 a day in California (2012), adult day care can be $95 per day, and home care averages $50K a year.

When you consider that 70 percent of seniors age 65 or older are expected to need long-term care services some time in their lifetime,  it becomes clear why people want to figure out if they can afford long-term care insurance.

The question of how much is long term care insurance is not always an exact answer. Long-term care insurance cost is determined by the needs of each customer. You need to look at the cost of long-term care in the area where you live, the assets you want to protect; and the amount you are willing and able to pay out-of-pocket if expenses are higher

Long-term care insurance is not a "one size fits all" product, and the premiums will vary from person to person.  Here are ways to pay less for long-term care insurance:

Purchase at an earlier age
The older you are at purchase, the higher the premium will be for any given long term care insurance policy.  Getting it at the earliest age possible will result in a lower, more affordable annual premium, and usually results in paying less total premiums over the course of a lifetime. For example, a married 52-year-old man in good health can buy a long-term care insurance policy with a 5% compounding $150 daily benefit and 1095 multiplier for about $1000 a year. The same policy has grown to $244/day 10 years later. To buy it then would cost him nearly $2500 a year. Assuming payment to 82, the purchaser at 62 years old would have paid 40 percent more in total premiums and would have $438,520 fewer benefits available at age 82. The purchaser at 52 years old has $1,135,807 in total benefits at 82.

Your good health buys it
As with most life and health insurance policies, long- term care insurance policies have lower premiums for those whose health is good at the time of application. The longer you wait, the more you risk that your health will change. If your health changes, you could face higher premiums, or may not be able to purchase protection at any price.

Consider co-insuring future costs
 When considering a long-term care insurance policy, consider how much income you'll have available each month from investments, pensions, Social Security, and other sources. If you are able to do so, you may choose to use some of this income to pay out-of-pocket for a portion of whatever long-term care you may need.

Select an appropriate elimination period

The "elimination period" is the number of days long-term care must be received before benefits begin to be paid under the policy. A longer elimination period offers a lower annual premium. But if costs in 30 years are over $1000 a day, could you pay that then, or would you have preferred quicker reimbursement by paying a little more premium?

Couples pay less
If spouses apply for long term care insurance at the same time, many insurers offer a discount on both policies. Often, one partner can keep half the discount, even if they are the only one ultimately insured. Often a "couples" discount can apply to unmarried adults sharing a living space, depending on the insurer. <LI><STRONG>Can you qualify for a group policy - </STRONG>Some carriers will give a discount for being in a group of 3-5 workers, even if only one person decides to get insured. Self employed and corporations can be eligible for tax deductions on their LTC premiums.

Design for each partner
Women generally live longer than men, so couples may want to consider obtaining less total coverage for a man, and more coverage for a woman.  The resulting premium may be less than getting identical policies.

The point is when trying to see whether you can afford long term care insurance or to find out how much is long term care insurance, you should consult with a professional in the field. Seek advice from a professional who works full-time in the long-term care insurance field.  They know when and how to apply each of these techniques, and are able to show you all your options.