How Your LTCI Benefits Affect Your Premium

Practically everybody who is in the process of planning his long term care (LTC) knows that the amount of his long term care insurance benefits will affect the price of his coverage. Despite this fact, not many people are sure how to calculate their benefits. rnIt’s no secret that long term care insurance (LTCI) companies can raise the premiums of certain policies if they deem it necessary. It’s also no secret that these companies simply have to get approval from the state insurance commissioner for the implementation of their premium rate increase. With this in mind, many people are worried that even if they manage to clinch an affordable policy with a high maximum daily benefit amount, it might not take long before their premiums shoot up. rnNow if that happens they fear that they might not be able to afford the new price of their coverage anymore and they will be forced to drop it. rnThis fear of LTCI premiums, however, is actually unnecessary because it’s only those individuals who buy an LTCI policy at a later age, like past 65 or so, who are subjected to pricier coverage and the reason behind this is usually a defect in their health. rnYounger buyers of LTCI policies almost always qualify for the preferred health discount of 15% or even a higher percentage amount. Furthermore, they can look forward to receiving annual tax deductions until the day a benefit trigger occurs and they qualify for their policy’s benefits. rnWhat Should Factor in Your Long Term Care Insurance Benefits? rnAccording to experts in the LTCI area, the most important determinant of your LTCI benefits is your family’s health history. rnIn case you find out that you are genetically predisposed to Alzheimer’s or other chronic illnesses like diabetes, high blood, heart disease, and cancer to name a few, you should consider a higher daily benefit amount as you are likely to require care in a nursing facility. rnMeanwhile, if your family does not have a history in any type of chronic illness, you can settle for a maximum benefit amount that conforms to three years of care, which is the average length of LTC. Experts, however, do not encourage that you bar nursing home care from your plan because the Department of Health and Human Services said 40% of elderly people past 65 years old are expected to require this LTC setting. rnAlthough an LTCI policy which does not include nursing home coverage will have a lower annual premium, the insured is going to be at risk of higher out-of-pocket expenses because no one is completely exempted from nursing home care. rnPerhaps the best way that you can save on your LTCI premium without sacrificing your insurance benefits is by buying your policy early and with a lump sum. If you cannot afford the one time premium payment, then go for the limited payment mode as this will spare your policy from possible premium hikes in the future. rnThe amount of your long term care insurance daily benefits is very important so while you can cut back on this to save on your premium, it is not recommended. However, if you a really have to reduce it, find time to discuss your coverage with your LTCI agent.