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How to lower your ltc insurance premiums

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New premiums for LTC Insurance have increased - but there are ways to adjust benefits to reduce initial premiums

Publicado en: Economía y finanzas
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How to lower your ltc insurance premiums

  1. 1. LTC INSURANCE How to lower your premiums on
  2. 2. 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!
  3. 3. 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…
  4. 4. $9,015.68 (per year) Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
  5. 5. Wait, what?
  6. 6. What if you could reduce that premium – by a lot??? But…
  7. 7. 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.
  8. 8. Cost reducing Tip 1 Consider having your husband buy. When couples both get coverage, premiums are substantially reduced
  9. 9. 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
  10. 10. 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.
  11. 11. Cost reducing Tip 2 Increase your elimination period, or deductible. Increasing the period from 90 days to 180 days will result in…
  12. 12. New Premium: $4,027.69 (4,988 total savings) Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
  13. 13. Not surprisingly, claim studies show that people with longer deductible periods don’t have as high claims and can be offered lower premiums.
  14. 14. 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:
  15. 15. New premium $1,532.61 (7,483.07 total savings) Source: Leading LTCI Insurer, 2015 standard rate class, Alabama
  16. 16. 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
  17. 17. 1,500 Bananas per year? I can afford that.
  18. 18. 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)
  19. 19. 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
  20. 20. 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.
  21. 21. THANK YOU!