Our NY estate planning lawyers frequently advise local residents that in virtually all cases the single best way to prepare for possible senior care needs is by purchasing long-term care insurance (LTCI). Unfortunately, the biggest barrier for most families in securing LTCI is cost. Depending on one’s age when purchasing the product, the premiums can be prohibitive. Gender also plays a role, as women may have higher rates because of their longer life expectancy. We reported last month on one large LTCI insurer, Genworth, making the decision to institute “differential pricing” to charge women more. Reports suggest there could anywhere from a 25% to 40% gender price gap.
Of course the trajectory of these insurance costs mirror the actual costs for nursing home stays or at-home caregivers. As the price of that care rises, so does the cost of LTCI insurance.
Act Now and Act Smart
The only way to know for sure if LTCI fits in your situation is to talk with a professional and get tailored advice. Last month Money Talks actually published a helpful article that discussed a few ways that LTCI costs might be reduced.
The first piece of advice from the story: lock in rates now. LTCI insurance is essentially about paying in a set amount each year today so that funds will be available down the road–5, 10, 15, 20 years later–when or if specialized care is needed. Obviously the earlier you buy, the better. Also, because insurers are beginning to implement price increases, buying now may offer a huge boost.,
In addition, there are ways to alter the details of the policy to better fit your means. Most policies come with a “waiting period” before the policy kicks in, a deductible amount, and total coverage limits. Premium amounts can be tweaked by altering those policy details. A professional can help explain the pros and cons of each.
Applying with a spouse may also save on costs. As with anything, buying more often comes with discounts. In most cases the specifics of the benefits can be edited for each partner to maximize value.
To learn more about long-term care insurance options and an overall elder law estate plan in New York, please contact our team today to see how we can help. Our team can also discuss possibilities to consider on top of LTCI or on top of it, like a Medicaid Asset Protection Trust.