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When you retire, you often want to limit financial risk while keeping your costs low to avoid running out of money. One way to achieve both lower risk and lower overall costs is to buy long-term care insuranceAccording to the U.S. Department of Health and Human Services (HHS), nearly 70% of people over 65 will require some form of long-term care for an average of three years.
Because Medicare and traditional health insurance do not cover most types of long-term care, such as home care or assisted living long-term care insurance for your 70s can help defray these costs. It can also help avoid having to rely on unpaid support from your family, which can affect their finances.
“As with all insurance, the younger and healthier you are when you purchase it, the lower premium costs and more coverage options come with it. The ideal age to get long-term care insurance is 60, but if you are still healthy If you reach the age between 70 and 75, it could still be possible to get a policy for higher premiums,” says Chris Orestis, president of Retirement Genius.
Find out what the best long-term care coverage options are for you.
Want to get long-term care insurance in your 70s? Do this to keep costs down, experts say
That said, there are steps you can take to keep costs down when purchasing long-term care insurance for your 70s. These include the following:
Shorten your benefit period
Unlike health insurance, which typically has policy limits that renew each year, long-term care insurance instead provides coverage for a set number of years once qualifying events occur. So if you choose fewer years of coverage, the price of long-term care insurance may decrease.
“I would start by reducing benefit coverage to a four-year time frame, as this covers the average length of care needed for most seniors,” said Eleanor I. Johnson, founder and principal of Highland Capital Brokerage.
As she notes, the average length of long-term care needed for men is 2.2 years and for women 3.7 years, according to the HHS. A benefit period of four years would therefore be sufficient for many people.
Read more about the benefits of the right long-term care insurance here.
Choose a longer elimination period
Long-term care insurance policies typically have an elimination period, which is the length of time between when a qualifying event occurs and when coverage actually begins. And the elimination period you choose can affect rates.
For example, “rather than opting for a 90-day elimination benefit, a 180-day elimination would reduce costs,” says Allen Haney, co-founder and president of The Haney Company.
Reduce the benefits
While you ideally want a higher benefit amount to reduce financial risk, a lower benefit amount can help costs of long-term care insurance.
“The cost for $2,000 per month, or a prorated daily benefit amount, is about half the cost of a policy with $4,000 per month coverage. Don’t let the perfect, higher amount stand in your way of doing something to cover your costs,” says John Hearn, market president of The Benefit Company, an IMA Financial Group company.
Limit extras
Long-term care insurance may vary based on the specific features you choose when filling out an application for long-term care insurance, but it may not be worth it to include several add-ons or extras on top of what a basic policy covers.
“Many long-term care policies offer inflation options and other bells and whistles that add premiums to a plan. Removing some of these non-essential extras to make the plan affordable is better than having no coverage at all,” says Hearn.
For example, “paying for an annual increase in the cost of living after age 70 may not be that valuable,” says Haney.
Choose a hybrid policy
Finally, consider other insurance options besides standard long-term care insurance.
If you’re healthy, consider getting a hybrid life/long-term care insurance policy, or enrolling in a long-term care annuity, which can pay out tax-free income if you can no longer keep two. or more activities of daily living (ADLs, the standard for long-term care insurance coverage), says Orestis.
Although a combined policy may cost more than a standard policy, you can get more value from the plan and potentially save money if you plan to purchase separate policies.
it comes down to
While long-term care insurance the cost usually becomes more expensive when you’re in your 70s, but it still can be worth getting a policy, assuming you meet the requirements for long-term care insurance, which usually means you’re in relatively good health. From there, you can adjust various policy tools, such as benefit amount, benefit duration, and elimination period, to reduce costs, as well as explore alternative coverage options.
