Genworth Financial recently released a cost of care study that showed that the national median rate for a private room in a nursing home is $240 per day, or $87,600 per year–a 4.35 percent increase since 2013. Long term care costs widely vary statewide, with costs in some states ranging over $100,000 per year. Many seniors purchase long-term care insurance to help with paying for nursing home care, but many struggle to afford the premiums, which can run as high as $5,000 per year.
There are ways to reduce your long-term care costs:
- Buy long-term care insurance at a younger age. Premium increase as you get older, so the younger you are at the time of purchase, the lower your premium. Keep in mind that your insurer may still raise your premium at any given time, even if your policy is “guaranteed renewable”.
- Don’t purchase a lifetime policy. A lifetime policy is unnecessary unless you have a chronic illness, and the most you want to purchase is for 10 years. For most people, a three- to five-year policy is sufficient.
- Consider paying for part of your daily benefit and insure for the maximum daily benefit minus the amount you pay.
- There is usually a 30-90 day waiting period before coverage begins. Stretching this period out a bit longer may lower your premiums. You will still have to pay for your care until the waiting period ends and coverage begins.
