Long-Term Care Insurance Cost Nears $2,000 a Year
for a Senior Citizen
Insurance association releases 2008 national price
index
June
13, 2008 - A 65-year-old considering long-term care insurance protection
can expect to pay $1,342 a year, if married, or $1,999, if single,
according to the 2008 Long-Term Care Insurance Price Index, an annual
report from the American Association for Long-Term Care Insurance. Costs
for coverage increased about 4 percent over 2007.
A 55-year-old purchasing comparable coverage will
pay $709 a year, if they are married, or $1,095, if they are single,
according to the report.
The annual index measures current costs for
top-selling long-term care insurance policies that offer consumers
approximately $115,000 in current benefits (base-level coverage), with
protection increasing yearly as the individual ages.
"That coverage will grow in value to over $305,000
of protection in 20 years," explains Jesse Slome, Executive Director of
the national trade organization that conducted the research.
The study compares costs for plans that provide
benefits for three years or longer with an annual compound inflation
option that increases the available insurance benefits by five percent
compounded each year.
"The cost of long-term care insurance is directly
linked to interest rates, the anticipated likelihood of claims as well
as care costs," Slome explains. "When interest rates decline as they
have in recent years, insurers need to increase premium costs. And as
our society ages, more people will be needing long-term care that
becomes more costly each year."
"People often ask what is the best age to buy
long-term care insurance protection and the honest answer - a month or
two before a change in your health," Slome says.
"But since no one can predict when that's going to
happen, we try to show people the benefits of planning early, generally
in their mid-50s is a good recommendation."
Another Association study of leading insurers which
issued 250,000 individual long-term care insurance policies in 2007
revealed that significantly more individual applicants in their 50s
qualify for preferred health discounts than those who wait until their
60s to apply (51.5 % versus 42.2%).
While most people will derive benefit from their
long-term care insurance at older ages, some require care in their 50s
and 60s as a result of accidents or early-onset illnesses such as
Multiple Sclerosis and Parkinson's.
"Some 12.5 percent of new claims filed in 2007
start before the individual turned 70," Slome added.
Below is the 2008 National LTCi Price Index.
Average price for a comprehensive long-term care
insurance policy (100% home care benefit + skilled care coverage) 90-Day
Elimination Period with 5% Compound Inflation Protection Option
Age 55
Option 1: $100 Maximum Daily Benefit x 3
Year Benefit Period Cost: $709-per-year Individual Qualifies for
Preferred Health and Spousal Discounts
Option 2: $100 Maximum Daily Benefit x 3
Year Benefit Period Cost: $1,095-per-year Individual is single
(preferred health discount)
Option 3: $150 Maximum Daily Benefit x 3
Year Benefit Period Cost: $1,064-per-year Individual Qualifies for
Preferred Health and Spousal Discounts
Option 4:150 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $1,578-per-year Individual is single (preferred
health discount)
Age 65
Option 1:$100 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $1,342-per-year Individual Qualifies for Spousal
Discounts (standard health)
Option 2:$100 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $1,999-per-year Individual is single (standard
health)
Option 3:$150 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $2,013-per-year Individual Qualifies for Spousal
Discounts (standard health)
Option 4:$150 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $2,998-per-year Individual is single (standard
health)
Option 5:$240 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $3,221-per-year Individual Qualifies for Spousal
Discounts (standard health)
Option 6:$240 Maximum Daily Benefit x 3 Year
Benefit Period Cost: $4,729-per-year Individual is single (standard
health)
June
13, 2008 - A 65-year-old considering long-term care insurance protection
can expect to pay $1,342 a year, if married, or $1,999, if single,
according to the 2008 Long-Term Care Insurance Price Index, an annual
report from the American Association for Long-Term Care Insurance. Costs
for coverage increased about 4 percent over 2007.