The type of Long Term Care Insurance Policy chosen, daily benefit amount to be paid, your age, number of years the policy will pay benefits, choice of inflation protection and the number of days after you qualify for the benefits before the company will start to pay benefits are factors which influence your Long Term Care Insurance Policy Premium. If you have a pre-existing condition, your premiums may be higher if some companies agree to insure you. All of the above factors influence your LTCI policy premium.
Various LTCI companies calculate the cost of benefits you choose in a varying manner. This reason alone can make a significant difference between premiums for similar benefits. For instance, a company calculates the premium based on every $10 of the daily benefit you choose. If for each $10 of daily benefit the company charged $95, the premium would be $950 per year for a daily benefit of $100. With a similar package of benefits costing $150 with another company, the premium would rise to $1500.
The type and amount of inflation protection chosen will also influence your LTCI policy premium. The makes the cost nearly double for those in 40s and 50s and not expecting to need care for several years. As you age your ability to change LTCI policy diminishes but probability of developing health conditions which make you ineligible to apply for new benefits increases.
You may see an increase in your LTCI premiums over the years. A personal worksheet which explains the rate increases the company has had since 1990 is provided to you by your agent when you buy a LTCI policy. For rate increases for every company that sells go to the California Department of Insurance website. LTC insurance companies found it difficult to increase future premiums when California passed legislation in 2000.
When it became mandatory in 2006 for all companies filing for premium increases over a certain amount to offer a choice, policy holders got to choose between stop paying their premium and keep the benefits equal to the total amount of premiums already paid. The sum of premiums that has already been paid will finance only a small amount of care. If you were unable to pay because of a premium increase, you will not lose all your benefits.
Talk with your company for lower premiums by reducing some of your policy benefits. Your local Health Insurance Counseling and Advocacy Program (HICAP) office can help you if you have received a premium increase notice or you need to lower your premium.
Want to find out more about long term care insurance, then visit Maria Smith’s site on how to choose the best long term care insurance policy for your needs.
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