How to lower your ltc insurance premiums
-
Upload
ltci-partners-llc -
Category
Economy & Finance
-
view
560 -
download
3
Transcript of How to lower your ltc insurance premiums
Let’s say you are a 60 year old married
female interested in LTC Insurance. Your
husband is not interested in buying, but
you had personal experience with
caregiving and want coverage!
You research on the internet and read an article that the best plan design includes coverage that will pay you at least $4,500 per month for three years – with a benefit that will inflate at 5% compound.
You contact a leading insurer and find the premium for the above plan is…
You can reduce premiums by adjusting benefits. The following
examples represents savings possible through different plan design that
maintain the core value of LTC coverage.
Cost reducing Tip 1
Consider having your husband buy. When
couples both get coverage, premiums are substantially reduced
New annual premium for you when your
husband buys too: $5,281.19
($3,734 savings!)
Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
Why? Carrier claim studies show that when both partners in a
relationship have coverage they don’t claim as much as singles, and especially single woman.
That’s why they price products to attract male buyers – who are usually more reluctant to buy.
Cost reducing Tip 2
Increase your elimination period, or deductible.
Increasing the period from 90 days to 180 days will result in…
New Premium: $4,027.69 (4,988 total savings)
Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
Not surprisingly, claim studies show that people with longer deductible
periods don’t have as high claims and can be offered lower premiums.
Cost reducing Tip 3
Change the rate of inflation you policy increases each year. If you have the policy increase at a 2%
inflation rate instead of a 5%, the new annual premium would
be:
New premium $1,532.61(7,483.07 total savings)
Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
With inflation and interest rates very low, the cost of insurers to offer 5%
inflation is VERY expensive. For those who want more coverage, it might
make sense to buy a bigger monthly benefit up front instead of choosing an
automatic inflation increase
Let’s compare again. This is a long-term care plan for a 60 year old married female with a leading carrier and standard (non-preferred) rates.
Plan A Plan B
Monthly LTC Benefit for nursing home, assisted living or home care
$4,500 $4,500
Elimination Period (deductible)
90 calendar days 180 days of service
Benefit Pool 36 months x $4,500= $162,000
36 months x $4,500 = $162,000
Annual increase in inflation percentage
5% 2%
Couples coverage Only one spouse buys Both spouses must buy
Annual premium for her $9,015.68 $1,532.61($1,532.61 for him)
Other tips when buying LTC coverage:
• Don’t try and cover 100% of the cost -plan on coinsuring some of the risk
• Come up with a premium budget first than design a plan• Work with a professional who represents several carriers so
you can compare• Don’t always pick the lowest price carrier but instead focus on
benefits important to you• Don’t wait! Premiums are based on your age at issue. The
premiums for a 65 year old are much higher than a 60 year old
Copyright 2015 LTCI Partners, LLC. Products may not be available in all states and product features may vary by
state. If available, invitations for application for LTC Insurance are made through licensed advisors of LTCI
Partners, Lake Forest, IL, the agent in any application; in California and Utah, dba LTCI Partners Insurance
Services. Cal. License # 0D51716. LTCI Partners or its licensed representatives are currently licensed in all 50 states and the District of Columbia. License numbers are
available upon request.