Is LTCi Worth It? Get Real
Do you think the premiums for Long Term Care insurance (LTCi) are expensive? Have you heard people say this? Phyllis Shelton of LTC consultants gives facts about the current average LTCi premiums and the current costs of long-term care.
Take the group plan for state of Tennessee employees, for example.
A 50-year-old can get a $200 daily benefit to cover today’s cost of care with either a 3-year benefit period or a 5-year benefit period for only $159.14 a month or $224.26 a month respectively. If a spouse is also issued, the premium is reduced 10% for both the employee and the spouse and paying annually instead of monthly will reduce it an additional 8%. So now we’re at $1,591 for the 3-year benefit period and $2,242 for the 5-year benefit period.
Sound like a lot? Here’s the value proposition: The premium for the 3-year plan will cost $47,730 over 30 years and the premium for the 5-year plan will cost $67,260. At 5% compound, the daily benefit will be $823.23 in 30 years, which means the benefit pool for the 3-year plan will be $901,433 and the benefit pool for the 5-year plan will be $1,577,508.
It can be difficult to put a number in an insurance quote into perspective. The bottom line is that your LTCi premium will not be expensive compared to the costs you would pay for long-term care, and your peace of mind is priceless.
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