Three More Ways to Save on Long Term Care Insurance

There's increased interest in long-term care insurance as a most viable way to protect against the enormous and costly risk of needing long-term care at some point in our lives.

Because long-term care insurance is still a relatively new form of protection, many consumers are unfamiliar with the simple ways to reduce the cost. Here are two additional ways to save.

Married Couples and Partners Can Save 15% to 40% Each Year

Discounts are offered by long-term care insurance companies to married adults and even unmarried adults who are living together. These discounts vary from one insurer to another and typically require that both individuals purchase coverage.

However, some companies will offer a discount when only one couple purchases coverage (sometimes only one individual is insurable). Some companies offer discounts to domestic partners or individuals in committed relationships.

And, here's an important tip for those who are regrettably anticipating a divorce. At the time of writing this article, most insurers will not remove the "marital" discount when a couple gets divorced. But you'll need to buy this coverage while still married.

Adding A "Deductible" Can Save 20% Each Year

You are probably familiar with the concept of deductibles on your car, home and even your health insurance. Simply, you pay some of the cost before your insurance kicks in.

Deductibles on long-term care insurance policies are typically referred to as the Elimination Period. This is the number of days you choose to pay fully until your benefits for qualifying care begin.

The longer your Elimination Period, the lower your annual premium will be. Keep in mind that, generally, your initial need for long-term care will not be as intense or costly as the care you'll need over longer periods of time. Maybe you have family members or community resources you can turn to for those initial days.

A 2008 study by the long-term care insurance trade organization reported sales by Elimination Period:

20-to-30 Days 7% of buyers
31-to-89 Days 7%
90-to-100 Days 83%
100+ Days 3%

A Defined Benefit Period Will Save 16% to 53%

One of the most difficult decisions you'll face when selecting your long-term care insurance is how long should benefits last. No one can predict how long you'll need care.

Why averages are not relevant. Because your chances of needing long-term care are either 0% ... or 100%. Thus, a good way to approach your planning is to look at the value of financial assets you want to protect with long-term care insurance. Then you can back into a daily dollar amount and number of years of coverage.

What can you save? A policy that pays for 5 years will save between 16% and 27% yearly compared to an unlimited (also called a lifetime) benefit. A policy that pays 3 years will save 36% to 39% compared to an unlimited benefit.

And, one of the best ways to save is to work with a knowledgeable long-term care insurance professional who has access to policies from multiple insurance companies. They should be willing to answer your questions and to provide you with no-cost price quotes without any obligation.