Are You Paying Too Much for Long-Term Care?

Millions of Americans have taken the first steps toward securing their financial future by purchasing a long-term care insurance policy. But a number of factors, including the lack of competition in the market, leave premiums at an all-time high and expected to rise.

Though few Americans are thoroughly prepared, nearly 70% of people will need some form of long-term care during their retirement years, with 20% needing 5+ years of care. Annual private and out-of-pocket spending on long-term care needs top $70 billion, yet only 10% of Americans over 50 own a LTC insurance policy.

Today, the cost of coverage is the top deterrent to increasing LTC insurance use among Americans.

With some knowledge and a little elbow grease, consumers can enter the insurance fray armed with their own cost estimates and realistic premium expectations.

In the slideshow below, we'll look at how premiums rose to such great heights and how you can properly plan for managing premium costs down the road.

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Karen Lorenzo

The biggest deterrent why people ignore acquiring ltci is due to its increasing cost. There are ways to mitigate the effects of premium hikes, dropping your policy due to an increase in rates could be one big mistake, you will get nothing in return if you have religiously paid the premiums and eventually cancelled it.
Lets take a closer look, use the data from Genworth regarding the current annual average cost of care, it showed that it is more risky to pay care out of pocket (, an individual will have to pay around $30,000-$46,000 and this is for homemaker services only, you would be thankful to spend $10,000 a year for long-term care insurance. In addition, the insurance provider plays a big role in determining the strength and affordability of your policy, so take time to check the company's credit and financial rating, based on, these ratings can help you check the stability of the providers in meeting the claims of policy holders so you get the best long-term care insurance. A lot of big names have exited the ltc market due to low investment return which is why ltci companies are requesting for rate increase.
Rate hike may sound ridiculous but according to, these increase are regulated and policies are priced fairly. It's a risk not to plan for future ltci needs and hoped that you will never have to deal with a long-term care event.

September 13 2014 at 1:48 AM Report abuse rate up rate down Reply