December 31, 2018 - voltus - Insurance - 25 views
Premium rates for Long-Term Care insurance have a reputation for being “high” and may be unaffordable to some people. This is usually due to the fact that people postpone investigating coverage until they are too old to receive a reasonable premium rate. Then, Is Orbera Covered By Insurance ? we don’t even know what Orbera is?
The younger you are when you purchase LTC insurance, the lower your premium will be for the life of the policy. For every year you wait to purchase coverage, your will be 8-15% higher. But this percentage does not include the fact that there is an overall upward trend in premium rates in the industry as a whole. When you include this upward trend in premium rates, for every year a person waits to purchase coverage, they will pay an additional 14% to 22% in premium. This means that if a 55 year old who purchases coverage today they are paying about twice as much as they would have paid 5 years earlier.
It can be a costly mistake to “wait until a certain age” to consider coverage. Some people heeding the advice to wait until the “perfect” age will develop health conditions that disqualify them from obtaining coverage and/or will reach an age where premiums are unaffordable.
Most people are surprised to learn that the total cumulative premium you will pay the insurance company over your lifetime is lower if you purchase coverage now compared to waiting until you’re older. For example, if a 50-year-old purchases coverage today and pays premiums until life expectancy, they will pay less total cumulativepremium to the insurance company than a 60-year-old who purchases coverage today and pays premiums until life expectancy. In addition, the 50-year-old is more likely to qualify for coverage and be offered preferred rates based on better health.
Some people ask, “What percentage of my family’s income should I allocate to LTC insurance premiums?” This will vary, depending on your situation. One guideline offered by the New York State Partnership recommends that you allocate no more than 7% of your annual income to LTC insurance premiums.
Are people in some age brackets better suited for choosing LTC insurance as their LTC Planning option than people in other age brackets? Yes, mainly due to insurance priorities and income. The fact that younger people tend to have insurance priorities that rank higher than LTC insurance makes younger people less likely to be able to afford LTC insurance, even though premium rates are fairly inexpensive.
The following is general information, based on our experience regarding age and suitability for LTC insurance coverage.
Under age 45: People under age 45 rarely purchase LTC insurance because they fall into the category of having other higher priority risks that must be covered by insurance. If they have properly prioritized their insurance needs, LTC insurance may be a type of insurance that they simply can’t afford at this stage of their lives. Another reason people in this age bracket rarely purchase coverage is that they are not aware of the risk. Few people in this age group have had a direct experience with long-term care so they are unaware of the need to plan ahead for their own care.
Between age 45 and 65: This is the fastest-growing age bracket for planning ahead with LTC insurance. People between 45 and 65 have normally met the three most important criteria for purchasing LTC insurance:
1. All their other insurance risks have been prioritized and are adequately covered.
2. They are still young enough to be in good to excellent health and qualify for coverage.
3. They can afford the LTC insurance premium.
Premiums for a 45 year old range from a low of $102 per month to a high of $184 per month.
Premiums for a 65 year old range from a low of $180 per month to a high of $355 per month.
People in this age bracket are also more aware of the need to plan ahead because they experience the highest percentage of parents or other relatives and friends in need of long-term care. People who experience a long-term care event in their circle of family and friends are highly motivated to develop a plan for long-term care for themselves and their own families.
Between age 65 and 75: People in this age bracket should strongly consider the appropriateness of LTC insurance as soon as possible. The major hurdle facing these people is qualifying for coverage -people who wait until later years to consider coverage take the risk of becoming uninsurable due to a health condition(s). The second major hurdle for people in this age bracket is premium affordability. Premiums increase significantly at these older ages with every succeeding birthday. Coverage is likely to be unaffordable for people who investigate coverage in this age bracket.
Premiums for a 70 year old range from a low of $247 per month to a high of $505 per month
Most people in the 65- to 75-year-old age bracket are in one of two situations:
1. They have already investigated LTC insurance and have either purchased coverage, or have made the decision to plan ahead with an alternative option.
2. They are suddenly highly motivated to investigate, or re-investigate coverage for a specific reason. For example, they or a loved one, or someone close to them has developed a health condition that has heightened their awareness of the need for long-term care. Hopefully, the person who is experiencing the health condition is not the same person who is seeking coverage.
We receive inquiries on a daily basis from people in this situation. Many times, the person inquiring about coverage investigated LTC insurance years earlier, but did not purchase coverage. Now, due to a decline in their health, they are motivated to buy coverage, but are uninsurable.Over age 75: Most LTC insurance claims are submitted between age 79 and 85. For this reason, insurance companies are not anxious to issue coverage to people who have waited until age 75 or older to apply for LTC insurance. One in three people between age 75 and 80 will not qualify for coverage due to existing health conditions. After age 80, odds are better than 50% that a person will not qualify for coverage. If they do qualify, chances are the premium will be much higher than they are willing or able to pay. If you are in this age group and want to consider LTC insurance, ask your financial advisor and LTC Planning and Insurance expert to analyze and offer some co-insurance options for making the premium more affordable
December 31, 2018 - voltus - Insurance - 28 views
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