A long-term care insurance policy can be expensive.
Be sure you can pay the premium and still afford your other health insurance and
other expenses. It's not unusual for a couple aged 65 to spend around $7,500 per
year for all of their health insurance coverage. The annual premium for
long-term care insurance policies with inflation protection can be as much as
$2,000 or more for a person aged 65.
The premium will be lower if you're younger, higher
if you're older. If you buy a policy at age 75, the premium will usually be much
higher and can be more than double than if you had bought the policy at age 65.
If you buy a policy with a large daily benefit, a longer maximum benefit period,
or a home health care benefit, if will also cost you more. Inflation protection
can add 25% to 40% to the premium. Nonforfeiture benefits can add 10% to 100% to
the premium, as noted on page 21.
When you buy a long-term care policy, think about
how much your income is and how much you could afford to spend on a long-term
care insurance policy now. Also try to think about what your future income and
living expenses are likely to be and how much premium you can pay then. If you
don't expect your income to increase, it probably isn't a good idea to buy a
policy if you can barely afford the premium now.
Some states have laws that limit rate increases.
Check with your insurance department to learn how your state regulates rate
increases.
NOTE: Don't be misled by the term
"level premium." Some agents might tell you that you long-term care insurance
premium is "level" and suggest that it will never increase. Except for whole
life insurance policies and noncancellable policies or riders, companies can't
guarantee premiums will never increase. Many states have adopted regulations
that don't let insurance companies use the word "level" to sell guaranteed
renewable policies. Companies must tell consumers that premiums may go up. Look
for that information on the outline of coverage and the policy's face page when
you shop.