Each of us will need to invest in long-term health care (LTC) at some point in our lives, making the need for long-term health care insurance an issue that reaches just about every household.
While many individuals will be affected by the need for long-term care, few realize this or why it’s essential. In addition, many do not realize the costs of long-term care insurance.
In this blog, we have compiled everything you need to know about long-term care healthcare insurance, including its costs, so you can make an informed decision before buying.
What is Long Term Health Care Insurance and Why is It Important?
LTC insurance is important for numerous reasons, including helping cover the costs of care needed when persons can’t perform normal daily living activities due to disability or illness. Long-term health care insurance also ensures access to necessary care and protects families from undue financial strain.
Long-term health care insurance can assist individuals in paying for long-term care like adult day care, nursing homes, and hospice care. It also helps pay for services involved with frail care, like assistance with everyday living activities such as dressing, eating, and bathing.
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How Much Does Long-Term Health Insurance Cost?
Long-term health care insurance costs can fluctuate based on varying factors, meaning rates aren’t set in stone. Usually, these rates increase as you age. In addition, individuals with pre-existing health problems or conditions may face significant long-term healthcare insurance costs and have difficulty finding LTC insurance overall.
The average LTC insurance cost is roughly $1,200 yearly for $165,000 coverage for a 65-year-old male, based on data from the American Association for Long-term Care Insurance (AALCI). In contrast, LTC insurance for a 60-year-old female is roughly $1,960 for the same coverage amount.
Married couples can purchase a joint policy, which is often more affordable. For example, a married couple aged 60 years will pay around $2,550 on average each year for a joint insurance policy. However, it’s important to note that this joint coverage comes with a combined LTC insurance coverage limit instead of two individual limits.
Additionally, it is equally important to note that long-term healthcare insurance costs will rise over the years. This is due to LTC insurance policies factoring in future inflation costs while adding 1 to 5% to the annual policy benefits. Adding this provision causes your LTC insurance rate to rise but provides a buffer to offset inflation growth.
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Factors Affecting Long-Term Care Insurance Cost
There are a few factors affecting long-term health insurance costs; these include:
- Total Coverage Amount: A long-term health insurance policy will specify influence costs, including maximum policy benefits, the pre-set daily limit, and the policy elimination period. Your coverage amount will impact how much you pay monthly.
- Health: Long-term care insurance companies may withhold coverage or charge you extra for additional coverage as opposed to a healthier person if you have pre-existing health conditions.
- Age: LTC insurance costs will increase as you age. When considering long-term care insurance cost by age, it’s clear that the younger you are when buying the policy, the lower your premiums will typically be. For example, the costs are lower for individuals who buy long-term care insurance in their 50s than those who are older.
- Insurance Company: As is the case with other insurance types, LTC insurance rates will fluctuate by company. It is in your best interest to procure quotes from numerous LTC insurance providers for the exact coverage level so you can accurately compare policy prices.
- Gender: When it comes to LTC insurance, women will often end up paying more as they are more likely to require long-term health care, as they tend to live longer than men.
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The Wrap-Up on Long-Term Health Care Insurance Cost: What You Need to Know Before You Buy
The answer to whether long-term health insurance is worth the investment is a resounding yes.
This blog has provided invaluable insights into what you need to know before buying long-term health care insurance. However, it’s important to note that no one element should determine your choice.
As such, you should examine each aspect profoundly and attempt to balance them with your needs. To learn more about long-term health insurance before you buy, visit my LinkedIn page.
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