Taking advantage of smart planning strategies and policy options can effectively reduce the cost of long-term care insurance according to the American Association for Long-Term Care Insurance.
"There are indeed often overlooked ways to save on this important protection," explains Jesse Slome, AALTCI's director.
For couples Slome suggests considering a long-term care insurance policy that offers a shared care benefit option. "The shared care rider typically allows a person to double the life-span and available benefits of their plan for less money," Slome notes. "What's mine can also be yours is the simplest way to explain this option. Instead of two plans each with a maximum available benefit pool of $360,000, the couple may be able to share a joint maximum of up to $720,000 available to each."
While shared care provisions can vary by insurance company and state regulations, the money savings benefits can be significant. Two 55-year olds each buying separate policies with $720,000 of benefits available at age 85 could pay $5,700 annually according to the Association's 2020 policy analysis. "Taking advantage of the shared care benefit option will save $1,000 or more and still give each spouse access to that $720,000 benefit pool at age 85," Slome shares.
A second money savings feature worth investigating provides flexible future benefit increases. "You want your future long-term care benefits to increase because care costs typically grow over time," explains Tim Dona, President of Newman Long Term Care, a national distributor focused exclusively on long term care planning solutions since 1990. "Historically long-term care insurance policies have offered three and five percent yearly increase options."
Today, several leading long-term care insurance companies offer additional options that can help reduce the cost of coverage. "For a couple buying at age 55, selecting a one percent growth factor versus the three percent option can save 36 percent yearly," Slome points out. "Selecting a two percent growth factor can still save around 16 percent in annual costs."
Another option worth investigating provides flexibility to accept or decline future benefit increases. "A flexible increase benefit enables you to save on your initial policy costs with the ability to increase future available benefits on a periodic basis," Dona notes. Policies offering this option qualify for Long-Term Care Partnership requirements in 26 states. Partnership plans provide added asset protection benefits designed to encourage more middle-income individuals and families to plan for the risk of facing long-term care (LTC) expenses.
To learn more about long-term care insurance costs and ways to save connect with an independent LTC insurance specialist by visiting the American Association for Long-Term Care Insurance website or call the organization at 818-597-3227.
Founded in 1998, AALTCI advocates for the importance of protecting against the real risk of needing long-term care and supports insurance professionals who market traditional and linked-benefit LTC insurance solutions.