A GLIMPSE INTO THE FUTURE

Six years ago, a married 55-year old might have bought an unlimited long term care insurance policy that paid $100.00 per day, for around $1,100 per year. Today, just using state cost averages and the company's new rate book, that same premium would be approximately $2,200.00 per year. (That assumes, of course, that there have not been any changes to their health that would elevate their "risk classification", and necessitate a more expensive premium rate.) Nor does it reflect the 6 birthdays that went by since they chose to wait. With each birthday comes a higher rate.

Today, that same person, even assuming they can still get the "preferred" rate from the insurance company, is now 61. That same policy's premium, which would now reflect that person's new attained age, would be around $2,800.00. Unfortunately, many simply will not be able to afford to spend that sum of money, or, they will elect to purchase a much lesser policy. From $1,100.00 to $2,800.00 in 6 years? You bet!

Moral to the story: get this coverage as young and healthy as you can. If you think its costly now, the alternative of staying self-insured, at the current rate of almost $60,000/year, (or 20 years from now, at the expected cost of $150,000/year,) is just too staggering. And that's just for one spouse. The strategy of long term care insurance is to purchase something that is comfortably affordable now, and let the 5% inflation protection continually grow the policy so as to keep up with the rising cost of care, thereby capping your financial exposure, controlling your future costs, and creating "stop-loss" protection for your assets. It's one of the best bargains in town.

See > Building a Policy – What's Right for You

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