How Much Long Term Care Insurance Coverage to Buy?

A common method insurance agents have used for years to sell policies is playing on the emotion of fear.  These old-school agents will call you non-stop until you agree to let them come out to your house, sit down at your kitchen table, and then scare you with inflated statistics until you give them the check.  Often, you'll end up buying way more than the average amount of insurance because of these high pressure tactics.  A common statistics that's used to sell long term care insurance policies is the annual nursing home cost rate.  The problem of focusing on just that number is about 75% of all long term care insurance  claims are for home care and assisted living facility care, not nursing homes.  These modes of long term care are most often much less than the nursing home cost. 

For example, to show how much money you can save by not buying a huge policy here's a little tip:  simple by decreasing the daily benefit from say $200/day to $150/day will save you 25% on your premium.  Keep in mind you'll still have the vast majority of the risk insured and the $150/day will probably cover most, if not all the cost of care. 

Like your home owner's insurance or auto insurance you may never use your long term care insurance policy, so finding the correct balance between too much insurance and too little is key.  When deciding how much coverage to buy be sure to factor in other income sources that you could use to pay for a portion of the care such as Social Security or a pension.  Maybe you can get away with getting $120/day in long term care insurance and use your Social Security to pay the other part. 

Again, you may never use your long term care insurance policy, but you might.  Having the majority of the risk insured, not the full risk, will keep the premiums down which at the same time give you that peace of mind that you're family is covered. 

LTC Tree is a virtual agency licensed in all 50 states.  We're not for everyone, but our process of talking to our clients over the phone, through email, and then mailing out the long term care info is a more appeal  alternative than an agent at your kitchen table.  If you'd like to shop the entire long term care insurance market by having your quotes mailed to you please fill in the form below.  Either way, thanks for reading today's blog, we really appreciate it.