Last Chance For Couples To Save 30 Percent On Long-Term Care Insurance

A significant savings opportunity when couples purchase long-term care insurance protection is about to disappear.  

Insurance companies continually change how they price policies.  At one time, insurers charged men and women equal amounts for identical long-term care insurance protection.  Starting around 2013, this policy changed as insurers found that women were far more likely to need care and utilize the benefits.  Today, women pay anywhere from 20% to 40% more than men.

As an inducement for couples to both purchase coverage, insurers have offered spousal or partner discounts.  These typically amount to a 30% savings when both partners apply and are insured or 15% when only one spouse is covered.

Now the spousal or partner discount is being reduced or disappearing as insurers file new policies for state approval.  The new discount will lower the potential savings to 15% and 5% respectively.

About a dozen states have yet to approve new policy pricing. This provides couples with an opportunity to lock in the higher discount and some significant savings.  According to the American Association for Long-Term Care Insurance, the states include California, Connecticut, Florida, Hawaii, New Jersey, New York as well as North and South Dakota and the District of Columbia.

The ability to lock in the spousal discount is one reason for individuals ages 50 and older to act.  Insurance companies require applicants to meet fairly stringent health requirements.  Recent studies reported by the Association reveal that after age 60, there is a 50% chance that one of the two spouses will not health-qualify for coverage.

Long-Term Care Insurance Discounts Can Be Meaningful

Costs for long-term care insurance will vary based on things you can't change such as your age, health status and the state where you reside.  How much you'll pay will also directly correlate with what benefit levels and options you choose.  Available discounts, such as the preferred health rating along with the spousal or partner adjustment can provide meaningful savings.  

According to AALTCI's 2021 Long-Term Care Insurance Price Index a California couple both age 65 in typical health might pay $3,350 for a policy giving each person $175,000 of potential benefits.  In Texas, where the higher spousal discount no longer is available, the same coverage would cost $3,850 annually.

What Discounts Can Maximize Your Savings?

When it comes to long-term care insurance, there are several ways to reduce the cost of coverage.  Insurers will generally offer a 15% discount to those who can meet preferred health standards.  A quick conversation with a knowledgeable agent can advise whether you can qualify for this discount.

An additional way to significantly reduce the cost is by choosing the appropriate inflation protection option.  Most insurers currently offer inflation options that increase your benefits by 3% or 5% annually.  However, some also offer a 1% or 2% option that can both assure meaningful future benefit growth as well as long-term cost savings.

Finally, comparison-shopping is vital.  While only a few insurance companies continue to offer traditional long-term care insurance, it is important to compare both benefit and policy costs.   A recent independent comparison of leading insurers found that equal coverage for a healthy couple both age 55 could cost as little as $3,430-a-year or as much as $6,320 annually.

To find the best long-term care insurance costs, experts recommend working with an agent who is appointed with multiple major insurance companies.  These individuals will refer to themselves as brokers.  While an agent can generally sell policies from one specific insurance carrier, a broker typically will represent multiple major insurers.