Long-Term Care Insurance (LTCi)
Don’t lose out on a couple’s* major LTCi discounts!
Many times with couples one person is just more proactive and that’s OK.
This is one time that I would suggest that couples nudge each other to look at the savings they get if they apply for LTCi together.
Here was an example of a couple who purchased LTCi policies together.
Rob age 50
Sam age 55
They were both in excellent health.
They decided on purchasing a LTCi policy that will provide them with LTC services for 3 years with a 3% inflation protection. Each year when they pay their LTCi premiums their benefits will increase by a 3% compound interest rate. And once they each qualify to receive LTC services they stop paying their yearly premiums.
If at age 80 Rob qualifies to start receiving benefits he will receive approximately $14,140 a month in reimbursement benefits (giving him a total $509,023 in reimbursement benefits for 3 years). If Rob, doesn’t use his entire monthly benefits in one month, the remainder amount will roll over to the next month. A three year policy might expand for example into a 4 year policy pending the amount of benefits Rob uses each month.
For Rob to qualify to start receiving reimbursement benefits a doctor will certify that he is unable to independently perform at least two activities of daily living (ADLs).
Here are the breakdowns of their yearly LTCi premium payments:
If the older male partner, Sam purchased this insurance on his own his yearly premium payments would cost him approximately $2,902.17
If they both purchased the policies at the same time here is the breakdown of their yearly premiums:
Younger Partner: $2,226.38 Older Partner: $2,596.68
Here are some facts, about average amounts of time people may need LTC services, supported by the Administration for Community Living, part of the U.S. Department of Health and Human Services*1. Nearly 70% of 65-year-olds will eventually need LTC services or support. Women typically need care for an average of 3.7 years, while men require it for 2.2 years.
A LTCi Plan is designed to help you live as independently as possible, for as long as possible. To help you thrive and enjoy life and not just go through the motions of your daily activities. Life is complicated. As the years go by, you may find that your old support networks are no longer available.
Having a LTCi policy that gives you approximately $14,140 a month in reimbursement benefits may sound like a lot. But, when you add up the costs of having a home-care aide for more than 12 hours plus a day, you may need a policy that provides more than $14,140 in reimbursement benefits a month.
When I turned 50 I purchased two LTCi policies. In my 80’s, they will provide me with approximately $17,000 plus a month of reimbursed benefits for 7 years. Being single, I wanted to insure I put a plan in place. Life for me may change. I might need to take my home-care aide with me to the theater. That’s OK. At least I’d be out and enjoying life.
By purchasing LTCi I feel secure that I have a plan in place. Hopefully, I will never need to use them! But just in case, I am fully prepared to embrace the extra help I may need to enjoy life to its fullest!
One more important piece of info: Depending on the type of LTCi plan you purchase your premiums might be tax deductible, helping to reduce your yearly out of pocket costs for your LTC plan.
Don’t let one of you be more proactive by moving ahead to purchase an individual LTCi policy. Take a look at the benefits of couples owning LTCi policies in planning for your future.
Let’s plan what LTCi policies work best for you.
*Couples/Partners means:
One person who is your spouse to whom you are legally married; your registered domestic or civil union partner; or an adult person with whom you share a serious and committed personal relationship that is intended to be lifelong and with whom you have shared a common permanent residence on a continuous basis for the most recent three years.
*1 How much care will you need -1.26.26