The average cost of a nursing home in Michigan is nearly $100,000 per year and the cost of an in-home care worker is between $15.00 and $20.00 per hour. At these rates, regardless of how carefully you plan for retirement, a catastrophic illness could wipe out your savings. The overwhelming majority of people however do not protect themselves and the high cost of long term care insurance is usually the primary reason. The following strategies can help you save money while still getting the long term care coverage you need:
- Buy a hybrid policy. If you are worried that you will never use your long term care insurance, a hybrid life insurance and long term care policy can help ease your fears and save you money.
- Buy young. The best way to get a cheaper rate for long term care insurance is to buy young. For example, a policy will cost a 65 year old double what it costs a 55 year old. Health is another factor that affects cost; better health will significantly decrease costs.
- Sign up with your spouse. Many insurers offer a discount if you sign up at the same time as your spouse.
- Pick a shorter benefit period. Most people will need long term care insurance for three years or less. So choosing a policy that covers you for two or three years can significantly cut your premiums.
- Lengthen the time you pay. If you choose a longer waiting period (known as an elimination period) before benefits kick in, you can significantly lower premiums.
- Lower the daily benefit amount. Consider a plan that will cover approximately two-thirds of your daily costs and try to pay the other third out of savings.
- Consider a lower inflation protection. Inflation protection will cover you from the costs of rising care, but it is rather expensive. Lowering the inflation protection can save money.
With so many options, it is critical to meet with an experienced elder law attorney to discuss your situation and how to best protect your life savings.