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How Long Does Term Care Insurance Cost 2018 (And Why)?

Exact Answer: Maximum Five Years

Long Term Care Insurance is necessary insurance which is for citizens above the age of 65 years. It is also for someone unable to do everyday essential activities. It can be a good option for the elders who have no one to look after the expenses that occur due to medical problems that they might face.

It covers home health care, nursing home care, and adult daycare expenses. It is especially for individuals above the age of 65 years who have an illness or a disability. It is because these people need constant supervision and care.

The premium for this insurance needs to be paid based on the type of policy that is being opted for.

How Long Does Term Care Insurance Cost 2018?

The individual that can avail the Long Term Care Insurance not necessarily be sick or of an older age. The basic necessity to avail of this insurance is that the person should be unable to perform basic things like bathing or dressing up. 

Various insurance providers in the market provide an option of Long Term Care policies that can help with expenses of in-home nursing, home care, assisted living, and so much more. A person can choose the insurance and the benefits as per their requirements. 

The type of policy is not only based on the benefits it will provide, but also on the amount of cover that it can provide. There are many options like a gold plan or platinum plan. The more the benefits and coverage in the plan, the more premium needs to be paid. The time for which the premium has to be paid is generally 2 to 3 years.

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The premium, and the time for which is to be paid also depends on whether a person is buying a traditional LTC policy or a Combination of LTC and Life Insurance. 

Policy requirementThe term for which the premium has to be paid
For people having serious injuries and ailments (considering the recovery)2 to 3 years (can be monthly or annual)
For people aged over 65Up to 5 years (can be monthly or annual)
For people who want to opt for a single paymentIn one go before the start of the policy term

Why Does Long-Term Care Insurance Cost That Long? 

Long Term Care policies like any other insurance policy are issued based on the premium that a person can pay. It is issued for a normal two to three years. If the policyholder feels he should extend the timing, he can extend it by paying an extra premium. Some insurance providers can also provide a policy that includes 12 months of care.

Besides, there are many other reasons why long-term care insurance will only cost five years maximum. The reasons are as follows:

  • The primary reason is the period for which a person needs long-term care. According to research, on average, women might need long-term care for about 3 to 4 years. On the other hand, men usually need it for 2 to 3 years. Policies that have one year as the coverage period will have a lesser premium.
  • The period for which the person has to pay the premium is directly proportional to the amount for which the person is covered. High coverage means a higher premium, and hence the premium paying period can go higher.
  • Add ons are another factor that directly increases either the premium amount or extends the duration for which the premium is to be paid. 
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Long-term care policies are ideal, as they are like an all-around health plan that will not only cover the health expenses but will even cover the cost for the support that is required during the recovery time at home or an assisted living facility.

Conclusion

It is very imminent that a correct insurance provider is selected. Some insurance providers may provide better benefits at lesser premiums. The rate also fluctuates, hence, it needs to be planned well in advance.

Choosing the correct long-term care at the right age can solve many problems in the future. There are a lot of available options. Option include stand-alone insurance, hybrid long-term care insurance, and even annuity-based long-term care insurance.

References

  1. https://www.journals.uchicago.edu/doi/abs/10.1086/261673
  2. https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1539-6975.2009.01286.x
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