With life expectancies growing longer, many Americans worry about needing long term care later in life. As costs for this care can quickly deplete savings intended for retirement or other financial goals, long term care insurance is an invaluable way to cover these expenses and protect assets. But its costs depend on various factors, including gender, marital status and health considerations as well as which policy you select and its coverages; you may pay extra if a policy offers features such as shorter elimination periods or cost-of-living adjustments to protect against inflation.
Long term care insurance premiums generally increase annually as you get older, and can even double for men aged 55 in comparison with female policyholders of equal age due to living longer and thus having greater risk of making long term care claims. Most policies offer various growth rate options which could range from 2-4% per year.
Shopping around for long term care insurance is also essential. Group plans at work often offer better deals, whereas individual insurers might offer better prices; to find the best price make sure to obtain quotes from different insurance providers in order to compare rates.
Senior citizens can enjoy tax benefits on the cost of long term care insurance premiums. You could deduct up to $1,690 annually – this amount increases for people aged 51-60 to $4,510 between 61-70 and $5,640 when aged over 70 – making long term care coverage more cost effective for many elderly individuals.
Some states offer “partnership” programs with insurance companies to encourage people to plan for long term care. Under such policies, you are typically allowed to keep one dollar of assets you would have had to spend in order to qualify for Medicaid per dollar your long term care policy pays out; furthermore, some states may reimburse some or all of your premium costs should you not use these benefits in any event.
Long term care insurance costs can be high, but it is wise to carefully evaluate all your options and consult a trusted advisor prior to investing in such coverage. Long term care coverage could prove advantageous depending on your unique financial circumstances.
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