Cost

How Much Does Long Term Care Cost?

Many people have heard that long-term care insurance is expensive. It can be, but it is not nearly as expensive as the actual cost of long-term care. The good news is that you have full control over what it will cost. If you plan ahead of time, and purchase long-term care insurance when you are younger and when you are in good health, the premiums for long-term care insurance can be very affordable. You also control what the cost is by the benefits that you choose.

The cost of a long-term care insurance policy depends on the following factors:

1) Your health
2) Your age
3) Your marital status
4) The benefits you choose
5) Any discounts you are eligible for

Tip:
Most companies will consider your actual age at the time of your application, while others base their rates on age nearest birthday. So if you have a birthday coming up, now is the time to apply to "save your age" which will save you premiums over the lifetime of the policy!

The old saying, "you get what you pay for", applies here. Long-term care insurance is the one insurance product that you do not necessarily want to get the best price on. Most major, reputable carriers price their products in the same ballpark. If you find a carrier charging considerably less, that should cause you some concern as to future premium stability.

"It is unwise to pay too much, but it is worse to pay too little. When you pay too much, you lose a little money - that is all. When you pay too little, you sometimes lose everything because the thing you bought was incapable of doing the thing it was bought to do. The common law of business prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder it is wise to add something in for the risk, and if you do that you will have enough to pay for something better." John Ruskin

Cost of Waiting Example

Many people think that they will save money spent on premiums if they just wait to buy long-term care insurance. This is absolutely untrue. The longer you wait, the more you will pay in premiums over your lifetime.

Each year that you wait:

Increases the annual cost of the insurance because you have to buy a higher daily benefit due to the fact that the cost of long-term care has gone up.

You are a year older so your premium will increase.

You are at risk in the event you have a health change and cannot qualify for coverage.

Example:
The following example uses a long-term care insurance policy that includes $150 daily benefit, four-year benefit period, 90-day elimination period, and inflation protection with a major carrier.
Bob is 50 years old and the annual premium is $1,338.75 in this example. If he paid this premium until he was 85 years old, he would have paid in a total of $46,856.25 in premiums.
If he waited just five years to purchase the same policy the annual premium would be $1,974.37. The increased premium takes into account that Bob is now five years older and he has to purchase a higher daily benefit since the cost of care has increased. If he paid until he was 85 years old he would have paid in a total of $59,231.10.
Waiting five years cost Bob an extra $12,374.85 in premiums over his lifetime… it did not save him a single penny! In fact, he was also uninsured for five years.

Level Premiums

Policies are sold as being "level premium" for the life of the policy. Unfortunately, many consumers mistakenly believe that this means that the cost of the policy will not increase. In reality, insurance companies can increase premiums if the increase affects an entire class of policyholder.

Some companies raise premiums more than others and this information is not readily available. Check with your state insurance department to find out about the premium-rate increase histories of both the company and the specific policy you are considering.

SAMPLE Quotes

Probably the most frequent complaint I hear from people that are trying to research long term care insurance is that they can’t find out how much the policy costs with out talking to an agent. The reason for this is many but the main reason is that long term care insurance is not a “one size fits all” product. The benefits you choose depends on your particular geographical location (i.e. How much care costs in your area) as well as what your budget can afford. With long term care insurance, you have the ability to create a policy where you are comfortable with the benefits as well as the premium which is why it is important to work with a qualified agent that specializes in long term care insurance.

Having said all of that, I am going against the norm and will provide you with some SAMPLE quotes. I capitalize “sample” because your particular situation may be different due to geographical location or health status. I am going to make an assumption that the sample couple is a preferred rating with regards to health and will pull quotes accordingly. The quotes will be for the couple together and will be an annual premium. The benefits are per person. For example, if you are a 55 year old couple and are looking at a 6-year plan, that would be 6 years for you and 6 years for your spouse. So, for COMPANY C, your annual premium would be $2598.00 annually. You will notice that the longer you wait to purchase a long term care insurance policy, the higher the premium. So, this should be strong encouragement to purchase as soon as possible.

I will not be giving specific company names-only their quotes. All of the companies I carry and use on a regular basis are the highest financially rated companies and are leaders in the long term care market. I refuse to do business with a company that does not have the aforementioned qualities.

Policy Benefits: $120 per Day/$3600 per Month Benefit (per person), 90 Day Waiting Period, Inflation Protection (This is a Comprehensive Policy that will pay for care in your home, in an assisted living facility, and/or a nursing facility):

Company A
	Length of Coverage
Age of Couple	4 Years	6 Years	Unlimited
45	$2,046	$2,478	$2,992
55	$2,800	$3,392	$3,704
65	$3,854	$4,667	$5,927
75	$6,845	$8,291	$11,509

Company B
	Length of Coverage
Age of Couple	4 Years	6 Years	Unlimited
45	$1,728	$2,124	$2,808
55	$2,016	$2,376	$3,132
65	$3,384	$4,284	$5,688
75	$7,632	$9,432	$12,564

Company C
	Length of Coverage
Age of Couple	4 Years	6 Years	Unlimited
45	$1,839	$2,240	$2,758
55	$2,157	$2,598	$3,042
65	$3,300	$3,940	$4,876
75	$7,085	$8,812	$9,980