Long-term care insurance has a reputation for being expensive, especially for people who waited until they were in their 60’s or 70’s to investigate coverage. But there are ways to lower your premium amount without sacrificing significant benefits. The elimination period is the most practical way to save money on your premium. For example, an elimination period in the range of 100 days can save a significant amount of premium dollars over a lower elimination period.
The more days that you are willing to pay for your care out of pocket before your policy begins paying benefits, the lower your premium rate. You can choose a variety of elimination periods, ranging from a zero-day elimination period—which would pay benefits from the first day you needed long-term care services—to elimination periods as high as 730 days or longer.
True long-term care is needing assistance for a period beyond 100 days. Short-term care, care needed for less than 100 days, can normally be paid for without significant hardship to the person receiving the care or their family. In certain instances, a percentage of short-term care may be paid for by your health insurance or Medicare. For these reasons, always concentrate your premium dollars on true long-term care. This means choosing an elimination period of at least 100 days. Some people view LTC insurance as a highly catastrophic type of insurance, and choose elimination periods much higher than 100 days—sometimes up to 730 days or more. We caution however, that this strategy could cause unexpected problems: if a policy’s benefits cannot be accessed until several months or years after the need for care, a policyholder and their family may be tempted to delay quality caregiving that could have been received earlier.
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