Long term care insurance is certainly a great way to reduce costs on a nursing home stay or, depending on the situation, in-home care or assisted living. But even the cost of long term care can sometimes be too much for some. Knowing how to keep costs down when looking for insurance for yourself or an elderly family member can be a good way to save money and use it for other, even more important, things. While these following tips won’t apply to everyone, our hope is that you can find at least one way here to help reduce the cost of senior care for your family.
Tip #1: Buy a “Shared Care” Policy with Your Spouse
Shared care policies are cheaper than buying two separate long term care policies, and they can apply to either or both spouses. Over the course of time, this saves you a lot of money, but only if you were going to be purchasing coverage for both you and your spouse anyway. It is usually not worth doing this if you weren’t planning on purchasing care for both of you because of the larger upfront cost.
Tip #2: Buy LTC Insurance Early
When you buy an LTC insurance policy at age 40 you are going to spend a lot less per month than if you buy a policy at age 60. Obviously you cannot go back in time and purchase a policy retroactively, but if you are thinking about care for a parent, don’t forget that it’s not too early to start thinking about your own care, too.
Tip #3: Pick Add-Ons Carefully
Insurance agents talk a lot about riders and add-ons, but most don’t have any real use to you. By looking at these and selecting which, if any, you are going to get, you can save yourself tiny increases in price here and there. For example, paying an extra $1,000 a year for a 1 percent inflation protection rider probably isn’t worthwhile. Paying an extra $100 a year for a 3 percent inflation protection rider probably is.
Tip #4: Buy Shorter Periods
You want to have the coverage that you paid for when you need it, but it’s hard to say how long you will need your LTC coverage for. By reducing the amount of coverage you need, you can drastically cut costs. For example, an insurance salesman might tell you that you need a policy that covers a nursing home stay for six years. But if you go with the three year policy, you can almost cut your yearly cost in half.
Which should you use? Nobody wants to be in the nursing home and then have a huge bill show up after a couple years. Isn’t the whole point of LTC insurance to eliminate this issue? Unfortunately, that’s just not how these insurance policies work. They only cover senior care for a set amount of time. Choosing the right timeframe now can save you money upfront, and prevent surprises later on. As a point of reference, the average length of stay in a nursing home is about two years. If you are unsure of which timeframe is best, consult with a senior care specialist.
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