LOS ANGELES, CA (June 25, 2013) -- Newer options are now enabling individuals in their 50s and 60s to reduce the cost of long term care insurance protection by hundreds of dollars annually.
"Few people have heard of the Guaranteed Purchase Option (GPO) that allows more people to buy coverage they can afford," explains Jesse Slome, director of the American Association for Long-Term Care Insurance (AALTCI). "You lock in lower rates and meeting the required good health qualifications, plus you still have the ability to increase coverage in future years. That is an extremely attractive combination of benefits."
A married couple both age 60 would each pay less than $100 per-month for roughly $165,000 of immediate long term care insurance protection according to AALTCI's 2013 Long-Term Care Insurance Price Index. "Adding the GPO option increases the monthly cost about five dollars each," Slome says. "The nominal amount provides enormous added value if they wish to increase their coverage in future years, especially if their health changes."
Slome advocates a 'Good, Better, Best' approach to long-term care insurance planning. "Good coverage today may cover most of the costs you'll face," he notes. "But just as we reduce the cost of car insurance and health insurance by accepting coinsurance, deductibles and even self-insuring some of the risk, you'll save considerably by doing the same with long term care insurance."
Historically, most long-term care insurance policies purchased by individuals added an inflation growth option. "Five percent was established as the norm in the 1990s when double-digit inflation was a recent memory but much has changed over 20 years," Slome points out. "Today, a three percent yearly increase in benefits is recommended as a best option for those willing to pay the higher cost." According to the AALTCI Price Index, a couple both age 60 will pay $3,725 yearly for $165,000 initial coverage that grows three percent yearly to reach $329,000 at age 85.
Not all insurers have introduced or make available the Guaranteed Purchase Option, also referred to as the Future Purchase Option according to the trade group. "Most companies extend GPO offers to increase coverage every three years but some cease future offers if you decline even one offer," Slome acknowledged. "An insurer may also cease offering increases at age 75 while others continue extending offers past that."
The analysis found significant differences between the various GPO offerings and a 40 percent price differential between the lowest and highest priced policies that included the option.
To get the best coverage and options, AALTCI advises working with a knowledgeable professional. Slome recommends asking two questions; how many years have you been selling long-term care insurance and how many insurance companies are you appointed with? "It takes at least three years but ideally five or more to really acquire the knowledge," Slome shares. "A good broker specialist will be appointed to represent and compare policies from at least four or five long term care insurance companies."
To access free guides outlining ways to reduce long term care insurance costs or to connect with designated long term care insurance professionals for no-obligation cost quotes call the organization at (818) 597-3227 or visit the Association's website at http://www.aaltci.org.
Company Name:American Association for Long-Term Care InsuranceContact Person: Jesse Slome
Email:info@aaltci.org
Phone: 818-597-3227
City: Los Angeles
State: California
Country: United States
Website: http://www.aaltci.org
