How You Can Save Money on Long-Term Care Insurance

Aside from retirement, you also need to prepare for your long-term care expenses. This refers to the home health care and personal care services that aren’t covered by regular health insurance. Long-term care is often provided to disabled persons and the elderly. 

Having to pay for long-term care can quickly drain your life savings and assets. One way to deal with the consistent rise of long-term care expenses is by purchasing an insurance policy. However, long-term care insurance isn’t cheap. A 55-year-old man will pay a premium of $2,220 per year on average. If you can't afford high premiums for long-term care insurance, don’t worry! 

Read this blog post to learn some ways to reduce your costs.

What Is Long-Term Care Insurance?

This insurance policy helps cover the costs associated with long-term care services. It is designed for individuals with chronic illnesses and those who require assistance with daily activities. Typical coverage includes the cost of staying in the following facilities:

• Home Healthcare
• Nursing Home Care
• Assisted Living Facilities
• Adult Day Care Center

Staying in any of these health facilities can be a significant burden on your finances. That’s why long-term care insurance will allow you to safeguard your financial future. Here are the other advantages of having a long-term care policy:

• Protects your savings and financial well-being
• Gives you more choices and flexibility
• Provides you with quality care
• Helps fill in caregiving gaps
• Relieves caregiver burnout and stress

Ways To Lower Your Insurance Premiums

Buy Coverage Early

Premiums for long-term care insurance rise as you age. The older you are and the more health problems you have, the more you will pay for your insurance policy. To save on your monthly premiums, it’s better to buy coverage early and lock in lower rates. 

For example, a 55-year-old man pays $2,220 annually. If he waits until age 60, his annual premiums would be more than twice as high. That’s because the premium amount increases by 2% to 4% for every year of age. 

According to the American Association for Long-Term Care Insurance (AALTCI), individuals should take out a policy in their mid-50s to save significant money in the long run. By purchasing early, you also have more time to build your financial future.

Get a Shared Policy With Your Partner

Some insurance companies offer shared policies that cover both spouses. Joint insurance policies have lower premiums, which makes them a cost-effective option. Under this policy, both spouses can make a claim and draw from the policy simultaneously. This is becoming popular with couples who want to reduce their annual premiums while benefiting from shared coverage.

You may also take advantage of marital discounts from different insurance carriers. If both of you purchase a policy, you may be eligible to save up to 15% on your premiums. Save money on long-term care insurance by getting covered at the same time.

Reduce the Coverage Term

Another way to lower your premiums is by reducing the coverage term or benefit period. This refers to the duration for which your long-term care insurance policy provides benefits. By choosing a shorter benefit period, you can lower your insurance costs.

Instead of purchasing a lifetime policy, you can choose from shorter coverage, such as two years, three years, or five years. If you don’t have a family history of chronic diseases, a reduced coverage term will save you thousands of dollars in premiums.

Utilize Your Health Savings Account

Did you know that your Health Savings Account (HSA) can help lower the costs of long-term care insurance? If you have sufficient HSA funds, your contributions can be used to cover your long-term care insurance costs. You can utilize your HSA contributions for your healthcare expenses. 

In addition, your savings account offers a lot of tax advantages. Since contributions to your HSA are tax-deductible, your money is guaranteed to grow tax-deferred. Consult with an insurance agent on how you can make the most of your HSA funds.

Bottom Line

Follow these four strategies to help make long-term care insurance more affordable. To learn more about different insurance products, Local Retirement Group is a company you can trust. Our team is committed to helping you achieve your financial goals. Whether it’s insurance or an annuity-related matter, we’ll guide you through every step of the way.  Give us a call today for a free  consultation!