In Search of Ways to Save on Premiums

This post is made by a guest blogger, Roberta Mejia from http://abcoflongtermcare.wordpress.com/.  It provides an answer to one of the most often asked question about long term care, and that is how to save on premiums.


Are you in need of tips to save on long term care?  Then you are reading the right article.  The cost of this insurance can be discouraging for some but being aware of the available discounts and saving methods can help you get over this fear.


Knowing how to make premiums manageable and affordable can remove the dilemma of purchasing LTCI.  If you think you really need it, do not let costs deny you access to premium long term health care.  Prices rise yearly.  If you buy a policy now, it can help you a lot.  The price today would be cheaper than next year.  Additionally, it is important to know that the rates in different care settings and the services they provide swell annually as well.


Choosing a financially stable and trustworthy company can ensure you safe and reliable deals.  With this, you know that your money is safe and that your financial pool can be well managed.  Do your research.  Check their profiles and know their credit history and credibility.  See what other policyholders from that company has to say about them.

Next, what you would want to do is get a good deal.  In your research, you should have included getting free quotes from those companies you have shortlisted.  This allows you to compare and save on prices.  Seek the advice of financial experts and talk with agents.  They might be able to give you advice as well on how to properly manage the costs.  Most of the companies offer free calculations from different insurance carriers.  You can Visit http://www.youtube.com/watch?v=UdRBi81A0Lw for long term care insurance premiums calculations.

Now, talking about discounts, there might be something available for you.  For those who are employed, you can ask your employer about group policy.  Some employers can also shoulder a portion of the premium, therefore lowering your payment.   Moreover, LTC benefits can also be added as a rider for those who have an existing life or annuity policy.  For married couples, a joint policy can be a good option to cover both spouses.  Preferring a policy with the longest waiting period can also give additional savings.

Checkout the Longtermcare.gov website for additional information on proper LTC planning and how you can save on long term care costs.

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Types of Arizona Long Term Care Coverage

My fellow blogger and long term care specialist Beatrixxx Lewis of http://longtermcaretalk.wordpress.com/ has shared another informative long term care post, particularly in the state of Arizona. Find time to read it to further enrich your knowledge in long term care insurance, its costs, policy types and benefits. 

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Long Term Care Insurance: Costs and Benefits

The very thought of long-term care can send shivers down most people’s spines. Whether it is the constantly increasing long term care costs, or even just the idea of being in an assisted living home, there is not much to look forward to when it comes to long term care.

With that said, the harsh reality is that more than sixty percent of people will, at one point in their life, need the assistance of long term care after turning sixty-five. Forty percent of those that currently receive long-term care are between the ages of eighteen and sixty-four. Because long term care costs are essentially inevitable for the average person, it is important that one evaluate long term care insurance rates, and consider the various ways and means that they can go about reducing their long term care insurance cost.

Long term care insurance premiums are on the rise, as insurance companies struggle to pay for the long term care costs of those living longer than expected. While long term care insurance premiums won’t increase by as much as insurance companies would like, most people with coverage can expect their long term care insurance cost to increase by as much as fifteen percent year-over-year. For those living on retirement, or a limited income, such increases in long term care insurance cost can be prohibiting. Fortunately, there are some very effective ways in which one can reduce their long term care insurance cost.

Shop Around

Perhaps the easiest and most effective way to cut your long term care insurance cost is to shop around the various providers. Before committing to any kind of long term care policy provider, it would be wise to check the long term care quotes of a variety of different companies. While the difference in the long term care insurance premiums won’t be overly significant, you will be able to reduce your long term care costs by shopping around and looking for better deals.

Plan Ahead

One of the best ways to reduce your long term care insurance cost is to plan ahead. Most people don’t think about long term care costs until they are older, and costs are higher. Planning ahead could involve researching family medical history, buying long term care insurance at a younger age, and also considering tax benefits involved with long term care insurance plans. By buying younger, you’ll be able to reduce your long term care insurance cost by paying premiums now and avoiding increases to long term care insurance rates that may take place in the future. While tax benefits won’t necessarily reduce your long term care insurance premiums, they may be able to help you get back more money from taxes and thus reduce your overall out of pocket costs. Lastly, it is possible to reduce your long term care insurance cost by knowing the medical history of your family. Provided there are no instances of Alzheimer’s or similar medical conditions in your family, you may not need to pay the long term care costs associated with a lifetime plan.

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Will My Long-Term Care Premiums Go Up As I Get Older?

 Long-term care premiums do not work the way your automobile insurance does. Just because you are getting older or are diagnosed with an illness does not mean your long-term care premiums will go up.

In fact, your premiums can't go up just for you. Long-term care premiums can only go up for an entire class of insureds and only after the insurer can prove to the various state insurance regulators that their claims for a specific class have varied significantly from actuarial expectations. In other words, if they raise premiums, it must be for cause and for an entire class of similar policyholders, not just you.

So, there is the possibility your premiums may go up, over the very long time period you would expect to own a long-term care policy. In fact, it is not unlikely that they will go up. But you wouldn't expect them to go up every year, like a health insurance policy might. On the other hand, they may never go up. You never know. It just depends on the claims.

Obviously, no one wants to pay more. The good news is there are a few things you can do to try to limit the chances of an increase in your long-term care premiums. The biggest is to purchase your policy from an insurer that is financially strong and has a large risk pool.

There are three primary ratings companies that evaluate the financial strength of insurers. They are AM Best, Moody's and Standard and Poor. The ratings issued by the ratings agency are important because they indicate the insurers ability to pay claims. Financial strength also allows an insurer to absorb more variance in claims experience than a firm with a weaker financial position.

The other issue is the size of the risk pool. In other words, how many people is that insurer insuring for long-term care? When it comes to avoiding premium increases, more is probably better. That is because insurers rely on something called the Law of Large Numbers.

The Law of Large Numbers says the larger the sample size, the less variation there is likely to be from the theoretical expectation. It is that theoretical expectation that your premium was originally based on, so all things remaining equal, a larger risk pool will tend reduce the chances of a premium increase.

Just to give you an idea, in 2007, according to a survey done by Business Insurance magazine, Genworth, the largest long-term care insurer, had 1,078,154 total long-term care policyholders. MetLife, the second largest, had 693,373. By the time you get down to number 10, there were only 30 thousand policyholders.

Remember that just because an insurer has a big brand name, or a big presence in your local area, doesn't mean they are big in long-term care. An insurer could offer you a great policy, at a very reasonable price - maybe even cheaper than anyone else - but because they are only insuring you and your two neighbors, when Joe down the street has a stroke, all three of you are likely going to experience a huge increase because ... you ARE the risk pool.

This is an exaggeration, of course. But you get the idea ...

That insurer may be the absolute best choice for your car or tractor or even your life insurance, but not necessarily for your long-term care insurance. Don't just rely on a brand name or the agent down the street. Do your homework.

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Aging In Place, What Americans Want

Many Americans prefer to remain in their own homes as they age, but that may mean preparing for long-term care, if needed.

Long-term care is ongoing assistance with basic activities of daily living—eating, bathing, dressing, etc. The need often stems from disability, chronic illness or cognitive impairment (like Alzheimer’s disease) and is far more common than most think.

Once synonymous with nursing home care, today, people needing long-term care have more options.

With the right support and tools, particularly quality care provided by formal and informal caregivers, people are now able to remain where they most want to be—at home.

Because of the wide array of options, we have a great deal of freedom when it comes to getting care. Unfortunately, few plan ahead and save enough money to pay for the services that they may need or want. To help federal employees and their qualified relatives, the U.S. Office of Personnel Management sponsors the Federal Long Term Care Insurance Program (FLTCIP).

Here is a look at some of the FLTCIP’s most popular benefits (a detailed listing of benefits is at www.LTCFEDS.com/programdetails/index.html):

Services by formal and in­formal caregivers at home re­imbursed up to 100 percent of the daily benefit amount. When informal care is provided by family, services are reimbursed up to 500 days in an enrollee’s lifetime.

The stay-at-home benefit allows for care planning visits, modifications to your home (e.g., a wheelchair ramp or bathtub handlebars), emergency medical response systems, durable medical equipment, caregiver training, and home safety checks.

Respite services are covered up to 30 times your daily benefit amount per calendar year. This means that if a friend or family member is providing your care, the FLTCIP will pay for formal services so that your caregiver can take a break.

Keep in mind that even when home care is provided by a licensed professional, a small amount of informal assistance may determine whether you can stay at home. Being able to re­imburse your informal caregiver can make a difference.

So what can you do to plan ahead? First, recognize the potential for long-term care needs and research how the cost of care could impact your future income and retirement savings.

Next, research your options. The U.S. Department of Health and Human Services’ National Clearinghouse for Long-Term Care In­formation at www.longtermcare.gov and the Online Consultant Tool at www.LTCFEDS.com/oct are excellent resources for information about paying for long-term care.

To learn more about the FLTCIP, visit www.LTCFEDS.com, or call 1-800-LTC-FEDS (1-800-582-3337) (TTY 1-800-843-3557), where a certified long-term care insurance consultant will speak with you about your particular situation, coverage options and the application process, and answer any questions you have.

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