YOU ASK:

How much does long term care insurance cost?

WE ANSWER:

The cost of premiums will vary widely, based on your age and occupation, as well as level of benefit, length of benefit payments and the options you add to the policy.

Here are the factors that will affect the cost of long term care insurance:

Age

The older the proposed insured, the higher the premium.

Experts say that the best time to buy this policy would be during your mid to late fifties. Premiums would be reasonable at this age, while the length of the paying period is not that drawn out, as opposed to paying periods of those who buy this policy at age 40.

One thing you have to remember, especially when getting a policy with guaranteed levels of premiums, is that the earlier you get this, the lower your monthly premiums will be. You need to compute this vis-a-vis the payment period. For example, which will be more cost-effective, buying the policy at 40 and paying $200 monthly for 20 years or buying the policy at 50 and paying $350 monthly for 10 years?

Level of Benefits

Your premiums will depend on the how much you want your daily or monthly benefit to be, as well as how long you want the insurance to be paying you for benefits. Of course, if you get a policy that pays for four years, the premiums will be more expensive than the one that will only pay for two years.

Elimination or Waiting Period

The waiting period is the length of time you stay in the nursing home, avail of in-home nursing or other long term care facility, where you are the one who will pay and not the insurance company. After this waiting period is satisfied, the insurance will start paying you your benefits, up to the specified maximum payment period.

As with other insurance products, if you opt for a longer waiting period, you can considerably lower your premiums. However, you also have to measure this against the amount of savings you have allotted for this expense.

Additional Riders

Riders to your policy will significantly raise your premiums. For instance, the rider that will adjust benefit amounts according to the inflation rate may increase your premiums by as much as 40%. The return-of-premium rider (where premiums are "repaid" to you after a specified length of time) can raise your premiums by as much as 50%.

Other Factors

Your premiums may also be affected by the state you are living in, since some states regulate the premiums while others allow insurance companies to set their rates based on market forces.

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