Insuring Your Future: Big Changes Ahead For Long Term Care Insurance

If Long Term Care Insurance is one of those things that you meant to do something about, but never quite got around to it, now is the time. In the next few months, rates for Long Term Care insurance will increase dramatically.{{more}} The major change is that unlike health insurance where gender is not a factor in premium pricing, companies will be able to price differently for men and women. Guess who is being rated higher? Women! 75 percent of residents in Nursing and Long Term Care Facilities are women, and therefore more likely to actually use the benefits of a Long Term Care Plan. Rates will no longer be gender neutral, with women paying the higher premiums.

Single women will be impacted the greatest because of the unisex rates and discounts that are applied for couples which can be as much as 40 percent. The new product will carry rates that will be sex distinct. Rate increases could be as high as 50 percent. For example, a policy with a $6,000 per month benefit, and a three year benefit period, today, could cost $4,000/year before discounts are applied, whereas the new premium could likely be $5,600 – a 41 percent increase with no discounts available to a single woman.

Even with the higher premiums, it does not decrease the need or value of Long Term Care insurance. Sixty percent of the population will require long-term care at some point in their lives. Medicare pays only for skilled care and there are many limitations to the coverage it provides. On the whole, Medicare pays only 2 percent of long term care costs nationwide. Medicaid does pay for 40 percent of nursing home expenses, but only when a financial need is proven according to state spend-down requirements. Long Term Care coverage can be used for expenses related to Assisted Living or Long Term care facilities, or at home. The average need for home care or stay in a facility is three years, and the average cost in Connecticut is $350/day in a facility and $200-$250/day for home care.

Why not act now and contact an agent who is a Long Term Care specialist, and find out what your unfunded need is for Long term care expenses, and determine the cost for a policy and if it fits into your budget. If not, there are life insurance policies to which you may add a rider that will allow you to access the death benefit to use for Long Term care expenses. These policies, while not necessarily less expensive, can be an alternative for those who are not eligible for Long term care insurance due to preexisting medical conditions as the underwriting requirements can be different. As with all insurance, we purchase protection against a risk, hoping not to need it, but want it to be there if we do. The goal is to find a plan that will meet those needs at a reasonable cost.

In light of changes on the horizon, why not move “investigate long term care insurance” to the top of your “to do” list and hopefully, avoid increased premiums. In this case, procrastination can be very expensive.