|$3,000 in monthly interest||$5,000 in monthly interest||$7,000 in monthly interest||$9,000 in monthly interest|
Note: A three-year benefit multiplier means that your policy will pay up to three times the monthly or daily benefit amount. Benefits multiples can give an idea of how long your policy benefits will last.
Factors affecting cost
gender (in most states)
Since 2013, women have paid higher rates than men for long-term care insurance in states that do not have legal gender insurance requirements. This is because women live longer than men, on average, and typically use long-term care benefits more often, accounting for the majority of benefit applications.
The older you get, the more expensive long-term care insurance will be. But if you buy when you’re very young, you’ll pay much longer installments, which may not be cost-effective. The AARP recommends purchasing long-term care insurance in the early to mid-60s, and couples making the purchases at age 55. Individuals may pay more in monthly premiums than they would if they started in their late 40s or early 50s, but they will pay less in total premiums until age 80 . Almost 70% of people age 65 will need long-term care.
Health status and smoking
If you smoke, your rates are likely to be higher. If you were healthy when you purchased your policy, your rates should be lower. You may pay more for certain health conditions, or you may be denied coverage altogether because of those conditions. The chance of this happening increases with age, so, if you’re worried about needing long-term care in your 60s, you may want to buy insurance when you’re in your 50s and well.
Maximum daily or monthly benefit amount
Long-term care insurance policies come with a cap on the amount the insurance company will pay for the care, usually expressed on a daily or monthly basis. Increasing your coverage limits is also likely to increase your premiums.
maximum benefit period
The maximum maturity period may be fixed after a certain number of years or Based on a maximum dollar amount that can last for any number of years. In some states, such as California, insurance companies are required to use a pooling method that multiplies your daily or monthly benefits by a certain number of years to determine your net earnings. For example, if your policy pays $5,000 per month and has a three-year multiplier, your benefit limit would be $180,000. If you use the benefit in full each month, your benefits will last for three years. But if you use less than the total monthly interest, your policy may last longer than three years.
When choosing a maturity period, keep in mind that 43% of claims are for a year or less, while 15% are for five years or more.
Most policies also come with an exclusion period, which is the amount of time you have to pay for care before your policy benefits start. Choosing a longer exclusion period, such as 90 days, can help reduce your premiums. Just make sure you have enough savings to cover the cost of care in the meantime.
Many insurance companies offer long-term care for commuters, such as inflation protection or a premium waiver that prevents you from having to make payments once you receive long-term care. In most cases, adding these benefits will increase your premium.
Best long term care insurance companies
The best long-term care insurance for you will depend on the individual factors that affect price and your coverage needs. Here are some of the best long term care insurance companies that you might consider.
- nationally: Nationwide offers a long-term care policy with an associated benefit that pays 100% of the monthly benefit for eligible policyholders plus a minimum of 20% of the death benefit for beneficiaries even if you’ve used up all funds for long-term care. Benefits are flexible and can be used to pay an informal caregiver, as long as the licensed health care practitioner agrees to the informal care. Nationwide has an A+ (excellent) financial strength rating with AM Best.
- New York Live: New York Life offers both traditional long-term care insurance and a life insurance policy. Policies can be customized to include the type of care you want, including care at home. You will need to speak with an agent for details. AARP offers long-term care insurance through New York Life as well. New York Life is rated A++ (excellent) for financial strength with AM Best.
- Omaha Mutual: Mutual of Omaha offers a traditional reimbursement policy that pays for your actual care costs based on receipts (after the cancellation period), or you can opt for a cash feature that pays you a set dollar amount each month. Mutual of Omaha also offers cost estimates online. The company holds an A+ (Excellent) financial strength rating with AM Best.
- Lincoln Financial: Lincoln Financial offers long-term care benefits only through comprehensive blended life insurance policies. There is no exclusion period, and the company uses simplified underwriting, so you won’t need a medical exam. Lincoln Financial has a financial strength rating of A (excellent) from AM Best.
- Brighthouse Finance: Brighthouse offers a hybrid life insurance product that provides a guaranteed death benefit and a monthly cash benefit in case you need long-term care (the latter reduces your death benefit). Unlike the reimbursement policy, you don’t have to submit receipts to get the feature. You can choose to associate your account with an index or indices to grow your benefits through investing as well. Brighthouse Financial has a financial strength rating of A (Excellent) from AM Best.
Your policy comes with a free look period that gives you a certain number of days to review and cancel your policy without losing money. In Florida, for example, you have a free 30-day search period.
How to save money on long-term care insurance premiums
- Choose a standalone policy: Several companies offer a hybrid product that includes life insurance And Long term care insurance. The benefit is that if you don’t need long-term care, your premiums will still compensate your beneficiaries. However, these policies usually have higher premiums. You can lower your premiums by getting a separate policy.
- Choose a payment policy: The cash benefit or compensation policy does not require you to provide receipts – you can use the monthly benefits as you see fit. But these policies cost more and may come with tax consequences. To save money, choose a payment policy.
- Choose a longer exclusion period: The period of termination of long-term care insurance affects your premiums. The cost of a policy with a waiting period of 90 days is usually lower than the cost of a policy with an expiration period of 30 days. Just make sure you have the savings to afford the cost of care while waiting for benefits.
- Choose lower coverage limits: You can choose to buy less coverage than you think you’ll need, and cover the remaining costs with your savings. This will lower your monthly payments.
- Compare quotes: Depending on individual factors, some companies may offer you lower premiums for the same coverage than others. This is why it is a good idea to collect a handful of quotes and compare your options. Just remember to compare third-party reviews from companies like AM Best and JD Power when evaluating companies, too.
- Buy with your partner: You will usually save money if you purchase a joint policy with your spouse.
- Buying in your fifties: Rates begin to increase between 6% and 8% per year in their 60s. If you bought in your fifties, your premium will be lower than if you bought later. You’re also less likely to be denied coverage for health reasons, and you’ll be able to take advantage of the policy if you need care earlier.
Knowing when to buy coverage can be difficult. Buying sooner means paying lower premiums, but your total premiums can increase over time. Use your best judgment. And if you have a history of family health problems that are likely to require long-term care (such as dementia), it’s probably wiser to get a policy sooner rather than later.
How to choose the best long-term care insurance
Decide if you want a hybrid or a standalone policy
Hybrid life insurance policies with long-term care benefits give you more flexibility. If you die without needing long-term care, your beneficiaries will receive a benefit. Another advantage of a hybrid policy is that the premiums are locked in, which may not be the case with a standalone policy. However, hybrid policies are more expensive than stand-alone long-term care insurance.
Decide how much coverage you need
The national average cost of a private room in a nursing facility is over $9,000 per month, but your long-term care costs will depend on where you live and what kind of care you seek. Many insurance companies offer a calculator that approximates costs in your area. When deciding how much coverage to buy, consider any money you’ll get from Social Security and your pension, too.
Compare types of coverage and their features
If you don’t want your family members to deal with providing receipts for compensation, consider a more expensive compensation policy, which means benefits are paid directly to you and receipts may not be required. You’ll also want to compare features like inflation protection and waivers for premium riders.
Compare company ratings
Look at financial strength ratings, customer service reviews, and National Association of Insurance Commissioners (NAIC) complaints indices for the companies you’re considering.
Avoid choosing a company with an AM Best rating of less than A- (excellent) or a higher-than-expected NAIC Complaint Index (above 1.00).
Try to collect quotes for the same coverage parameters so that you have a fair comparison. Pay attention to whether the premiums are guaranteed for a certain number of years or whether they may increase. You can also request a review of the company’s price history.
What is long-term care insurance?
Long-term care insurance reimburses the costs of care or offers a fixed cash benefit when the policyholder is considered chronically ill by a health care provider. Long-term care insurance can cover the cost of long-term care in your home or facility. Each policy places limits on how the money can be used, how long the policy will pay for benefits, and the maximum amount the policy will pay out.
Is long-term care insurance worth it?
In many cases, yes. More than 66% of adults 65 and older will need long-term care, according to the Community Living Administration. Paying for long-term care insurance allows you to cover your long-term care needs for pennies on the dollar, instead of depleting your life savings should you become chronically ill.
What holds you back from long-term care insurance?
You will not generally qualify for long-term care insurance if you are currently receiving long-term care or need assistance with any activities of daily living (ADLs), which are six specific daily activities such as eating and getting in and out of food. chairs. If you use a walker, wheelchair, multi-pronged cane, crutches, or oxygen, or if you have a condition such as Alzheimer’s or Parkinson’s, you likely won’t qualify.
What does long-term care insurance cover?
Most long-term care insurance policies provide benefits for care received in a variety of settings, such as a nursing home, an assisted living facility, or your own home. To start receiving benefits, your health care provider will usually need to certify that you either need help with two out of six ADLs or need supervision because of cognitive impairment. Some policies only reimburse the actual cost of care, while others offer a fixed monthly interest.