Few people understand the need to health qualify for long-term care insurance. And, this is one of the biggest mistakes people make; waiting too long. Nearly 14 percent of the individuals who took the time to apply for long-term care insurance between the ages of 50 and 59 were declined for health reasons last year (2007). That number increased to 23 percent for those between 60 and 69 and an amazing 45 percent for those applying between ages 70 to 79.
As mentioned earlier, companies offer discounts to those who apply while still in relatively good health.
Some 44 percent of applicants between the ages of 50 and 59 qualified for good health discounts. The percentage drops to 32 percent for ages 60 to 69 and 19 percent for ages 70 to 79. Standards vary from one insurer to another so those with health conditions will benefit by working with knowledgeable long-term care insurance professionals who represents multiple insurers.
There Are Ways To Reduce The Cost
Many of the articles you read discussing long-term care insurance use the term expensive when referring to this important protection. They fail to mention that there are many ways to obtain significant discounts today that can reduce the cost significantly; by between 20 percent and 50 percent a year.
The American Association for Long-Term Care Insurance conducts an annual Price Index that portrays what consumers can expect to realistically pay for suitable coverage. For someone age 55, a $100 Maximum Daily Benefit x 3 Year Benefit Period costs $772-per-year (assumes the individual qualifies for preferred health and spousal discounts).
Good health discounts can reduce the cost by 10 percent a year. Choosing a plan that pays benefits for 3 years will be between 25 and 30 percent less expensive than one that pays for five years. Today, some companies offer discounts to married couples, even when only one spouse buys.
Group Long-Term Care Coverage May or May NOT Be Your Best Bet
An increasing number of employers now offer long-term care insurance to employees. That's a good thing and clearly there are some advantages to group coverage that may offer guaranteed acceptance (no health underwriting). But, individuals who are eligible for good health discounts and other discounts available to married couples may be able to obtain more coverage for less money from an individual policy sold by an agent or broker. Bottom line, as with most purchases it pays to compare.
Prices Can Vary From One Insurer To Another
The difference in what you'll pay for basically the same benefit can vary quite substantially. Each insurance company has their sweet spots in terms of age and health condition. The Association recently did a study of costs for a typical applicant who was age 55. Costs for policies from New York Life were hundreds of dollars more than those from Genworth or John Hancock (all good companies).
A policy from Northwestern Mutual cost $1,000 more each year. That's just one reason why it is increasingly important to speak to a professional who can access protection from multiple companies. You'll save yourself quite a bit of money over the long haul.
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