Everyone wants lower monthly insurance premiums. That is especially true of long term care insurance (LTC insurance). We all want our long term care insurance to be cheaper and easier to manage financially, without sacrificing any of the quality of care.
Luckily, there are ways to get low cost long term care insurance.
Within this article, we’ll discuss the many ways to obtain LTC insurance at a lower monthly cost. We’ll look at factors that you have some control over, no control over, and a lot of control over, so that you can see what you can do (and what is outside of your control) to obtain LTC insurance.
About Long Term Care Insurance
Most financial experts recommend obtaining long term care insurance. 70% of adults over 55 will need long term care at some point in their lives, while fewer than 5 to 15% of those adults actually have it. That discrepancy is massive, and it is one of the reasons that LTC insurance is considered one of the most important and underutilized insurance options available today.
So why do so few have it?
Almost always, the answer is premiums. The average premium is about $150 to $200 per month. On a fixed income, especially for those that have life insurance, that can seem fairly steep. In addition, many people believe that they’ll be able to get help from family, or that Medicare will cover it.
The problem is that long term care costs about $400 per *day*. Most families do not have family members equipped to handle more difficult medical needs. Health insurance, including government healthcare, will also not cover any long term care unless you have exhausted all of your retirement, and even then they only cover certain types of care.
There is a reason that nearly all financial planners recommend LTC insurance. For those with any assets, or those that want a higher quality of care later in life, long term care insurance is the most effective strategy.
So, you’ll need to obtain long term care insurance, but you also want to make sure that you have the lowest premium possible so that it doesn’t create a financial burden. What can you do?
Let’s talk about how to make LTC insurance premiums less expensive.
Factors You Have Little to No Control Over
There are many factors that go into LTC insurance premium. Some of them you have control over, which we’ll get to in a moment. Others you have no control over. Let’s talk about those first. If you want to obtain a lower premium, some of the factors that you have no control over include:
- Be Male – LTC insurance is less expensive for men than women. That is because men are statistically less likely to require long term care, as many men either have living spouses that care for them or pass on due to more sudden issues (eg., heart attack and stroke).
- Have a Healthy Family History – Insurers typically ask about your parents’ and grandparents’ health and longevity when underwriting a policy, since conditions like Alzheimer’s, Parkinson’s, and other hereditary illnesses are strong predictors of future long term care needs. A family history of these conditions can raise your premium regardless of your own current health, even though you have no control over the health of your previous family members.
- Live in the Right States – Long term care insurance rates are approved on a state-by-state basis, and the average cost of care varies significantly from one state to the next (eg., a nursing home in New York costs far more than one in rural Alabama). Where you live sets a baseline for your premium before any of your personal factors are even considered.
- Have No Pre-Existing Health Conditions – A diagnosis already on your medical record, such as diabetes, heart disease, or a prior stroke, can push you into a higher rate class or disqualify you from the best pricing tier altogether. Unlike future lifestyle choices, a condition you’ve already been diagnosed with cannot be changed by the time you apply.
By the time you are looking to obtain long term care insurance, these factors are already set and cannot be changed. Some insurers may care about them more than others, but your premium will be cheaper if you are a male with no family history of medical issues requiring long term care, no pre-existing health conditions, and you live in a state with cheaper services.
Factors You Have Some Control Over
There are other factors you have *some* control over, but not necessarily full control. These can also have a fairly substantial effect on your LTC insurance premium, so it’s good to educate yourself on these to help you get the best rate.
- Obtain the Policy Younger – As the saying goes, the best time to obtain LTC insurance is yesterday, the second best time is now. While there are absolutely situations in which waiting can support a lower policy, your age when you obtain your policy is one of the primary factors in determining your premium, so the sooner you get it, the better.
- Be Married and Obtain a Combined Policy – If you are married, then you may want to consider a combined policy with your spouse. Combination policies often provide a significant discount, allowing you and your partner to obtain the same quality of care at an overall less expensive premium.
- Be a College Graduate – LTCR Pacific has partnerships with well over 300 academic institutions that allow us to offer lower premiums to graduates from a long list of colleges and universities. If you are an alumni of a college in the United States, it is helpful to reach out specifically to LTCR Pacific as there may be reduced premium rates available.
- Be a Member of a Professional Organization – Similarly, LTCR Pacific has partnerships with over 300 affinity groups and professional organizations, such as the American Bar Association, the National Society of Professional Engineers, IEEE, Delta Kappa Gamma, and hundreds more, that also allow us to offer discounted premiums. If you are a member of any of these organizations, we can typically offer you lower premiums than many other insurance agencies.
- Don’t Smoke – Smokers pay noticeably higher LTCI premiums than non-smokers. While your history of smoking does factor into your rate (and cannot be changed by the time you get a policy), the reason that this is partially in your control is because those that have been tobacco free for ~12 months (depending on your carrier’s requirements) can qualify for lower rates than those still smoking, even though they may be higher than those that have never smoked.
- Take Care of Your Current Health/Health Markers – While some components of your health are outside of your control, others you can have some control over. Premiums take into account a person’s weight, blood pressure, cholesterol, and more. If you’re currently taking care of yourself (or able to) and can address these numbers, you’re more likely to get a lower premium.
These are all factors that are difficult to control by the time that you’re looking to obtain long term care insurance, but you do still have some control over when it comes to getting a policy. Remember, however, that age is still a very critical factor, so waiting a few years to try to address some of these needs may not be ideal.
Factors You Have a Lot of Control Over
As you can see, many of the factors that affect your premium are, if not impossible to control, still challenging to address by the time you are looking into an LTCI policy. But what can you control? If you’re looking to get a cheaper LTC policy, these are the factors you have a lot of control over:
- Choosing an Insurance Provider/LTCR Pacific – You have control over your insurance company, and organizations like LTCR Pacific, specifically, have partnerships that are unavailable with many other carriers. You can choose to work with LTCR Pacific to see if we can obtain for you the lowest premium available.
- Adjusting Your Daily or Monthly Benefit Amount — The maximum amount your policy pays out each day or month for care is one of the most direct levers on your premium. A higher benefit amount for more expensive types of care generally means a higher premium, so choosing a benefit amount that meaningfully offsets your expected care costs, without over-insuring beyond what you’re likely to need, can bring your premium down considerably.
- Reducing Your Benefit Period — How many years your policy will pay out, whether that’s two years, three years, five years, or lifetime coverage, is a decision you make at the time of purchase, and shorter benefit periods tend to carry noticeably lower premiums. Most long term care claims resolve within a few years, so this is often one of the biggest levers available to lower cost without giving up meaningful protection.
- Extending Your Elimination Period — Similar to a deductible on other types of insurance, your elimination period is the number of days you pay for care out of pocket before your policy begins covering costs. Selecting a longer elimination period, such as 90 days instead of 30, can lower your premium, particularly if you have savings set aside that could cover those initial weeks.
- Choosing Your Inflation Protection Rider — Inflation protection increases your daily or monthly benefit over time to help it keep pace with the rising cost of care, and it’s typically one of the more expensive additions to a policy. You control whether to include this rider at all, and if you do, whether to select a simple or compound growth rate, both of which can meaningfully change your premium.
- Selecting a Hybrid or Linked-Benefit Policy Instead of a Traditional Policy — Hybrid policies combine long term care coverage with a life insurance or annuity chassis, and most come with premiums guaranteed never to increase, unlike a traditional standalone LTC policy where future rate hikes are always a possibility. Depending on your health, age, and how much liquidity you’re comfortable committing upfront, a hybrid structure can sometimes deliver a lower effective long-term cost even when the sticker premium looks different from a traditional policy.
- Choosing How You Pay Your Premiums — Rather than paying premiums for life, many carriers offer accelerated structures. Examples would be paying the full cost over 10 years or being fully paid up by age 65, and some offer a single lump-sum payment option too. These structures change how the cost gets spread out, and can lower the total amount paid over the life of the policy even though technically you are paying more for your premium early on.
These all require working with an insurance agency that understands your policy needs and can craft a personalized plan that makes sense for you.
How to Obtain a Lower Premium for LTC Insurance
If you want cheaper or lower cost long term care insurance, you need to be younger, healthier, working with LTCR Pacific, married, and willing to consider different riders and combination policies to help make it more affordable.
Some of these are in your control. Others are not. But the only way to know what your premium will be and how you can lower it is to speak to an insurance agent. With agents licensed in 40 states, LTCR Pacific is a great choice to address your LTCI needs. Reach out today to get started.