Cost of premiums. A common misconception regarding long term care insurance is that it is too expensive. While not right for everyone, it is affordable for many. Still, carriers have developed different ways to reduce current premium costs and help enhance consumer value.
“Many insurers provide discounts. Healthy applicants often qualify for a preferred discount. Several carriers discount policies bought by married couples. Other discounts are available for partners, sponsored groups, or associations, and for at least three or more family members who purchase insurance.
“Provider discounts that lower the cost of the care from standard billing rates. This typically works with a policy that offers a limited lifetime pool of money for coverage. Should the actual charges be less than the policy’s daily or monthly cap, the difference is put back in the insured’s lifetime pool, allowing him or her to use it at some future time.
” Future costs of premiums. Future premiums costs can be a big worry for consumers. Most policies are guaranteed renewable, meaning that the insurers cannot cancel a person’s policy due to declining health or any other reason except non-payment of premiums. However, insurers can increase premiums in the future, but only for a whole class of customers and only if the insurer can demonstrate to state regulators that experience warrants it. While this means that rate increases are unlikely, some situations might make it difficult for consumers to pay premiums, even if they stay level. For example, a married couple who relies on a fixed income payable as long as both are alive may, if one spouse passes away, find the existing premium unaffordable.
“To address this issue, carriers have developed limited pay options. Customers can pay up their coverage in different ways such as in ten payments, up to age 65. Using either of these payments options can help clients’ retirement planning and bring them peace of mind knowing their coverage is paid up.
“Long term care insurance typically waives premium payments while someone is on claim.
“Some policies provide for a survivorship situation. When both partners have held a policy for a number of years without using it, and one partner accesses benefits, the other partner’s premium is waived. If one partner dies, the surviving partner will not have to pay any future premium.