Elder Care Guide and Information

Everyone knows thay paying for insurance premiums is one thing we don’t like doing and long term care insurance is no exception. We pay these premiums because the alternative leaves our retirement income and investment assets exposed to high risk if long-term care becomes necessary and we have to pay for the care ourselves. It is no secret that the cost of health care facilities care can quickly drain your retirement funds and force a retiree into financial ruin. By purchasing long-term care insurance, a policyholder is accepting a small loss each year in the form of premiums paid. This relatively small loss helps ensure that he or she will not be wiped out financially by unmanageable long-term care costs in the future.

3 Choices for Premium Payment Periods

For those not familiar with long-term care insurance often wonder how long the premiums will need to be paid. The answer is that there are three choices for the premium payment period usually offered by insurance carriers. The most favorite choice by far is a ” lifetime ” payment period which requires the payment of premiums until death or until the policy is activated. Some object to paying these premiums for such a long period of time. In response to that objection, I usually ask prospective clients to consider other forms of insurance that they currently have right now. For instance, would they expect to only pay premiums for health or major medical insurance for a short time, or do they plan on paying those premiums for life? Would’t they expect to pay auto insurance premiums for as long as they drive? Isn’t it reasonable to pay homeowners insurance premiums for as long as they own a home? As long as the financial risk is present, the payment for the insurance premiums will always be there. Since the risk of needing long-term care is present for as long as we live, long term care insurance premiums can be expected for the remainder of our life.

Shorter Premium Payment Periods Equal Higher Premiums

The second and third ideas of payment of long term care premiums gives the policyholder to condense all of those expected premium payments into a shorter time period. For those under fifty-five years of age, a ” pay to age sixty-five ” option may make sense. For others a ” ten-year pay ” option can also be a good choice. Because the expected premium payments over a lifetime are simply put together into a shorter timeframe, the cost of these premiums is much higher. So therefore, these choices usually make sense for policyholders who can take advantage of tax deductions that help them reduce the overall cost of their long-term care insurance.

Filed under: Long Term Care Insurance