Wednesday, February 29, 2012

Should you Purchase Inflation Protection on your Long-Term Care Insurance Policy

It is a known fact that the cost of things do get more expensive over time, including long-term care services. So it is important that you take into consideration inflation protection if you are thinking about purchasing a long-term care insurance policy. The decisions that you make when you purchase a long-term care insurance will effect how much the policy will cover when you actually need the insurance and nobody can predict what the cost of care will be in 30 years. This information will hopefully help you in making an informed decision on whether to purchase inflation protection and what level of protection.

An inflation protection option will increase the daily benefit as well as the pool of money of a long-term care insurance policy. Inflation protection does come at an extra cost. Here are some of the more common options for inflation protection:

-5% or 3% Compound inflation increases - This will increase the daily benefit as well as the pool of money by either the 3% o 5% from the previous years daily amount. This will increase the benefits of a LTC Insurance policy over time, 15 years to double for a 5% Compound level.

-5% Simple - This will increase the daily benefit as well as the pool of money by either 3% or 5% from the original daily amount. This will increase the benefits of a LTC Insurance policy as well over time, 20 years it will take to double.

-Consumer Price Index Increase - The daily benefit and pool of money will be recalculated each year based on the CPI, which has been an average of 2.5% from 2003-2009.  This increase will also increase your premiums when opted for the increase.

The cost of care has been increase on an average compound rate of approximately 4.5%.

Generally the 5% compound option is typically a better option for those who will keep their policy for a longer period of time, say under the age of 60 if it is affordable. If it is not affordable then the 3% Compound might be a better choice versus the 5% Simple. After 32 years of a policy being in force, 3% compound will outpace 5% simple.

CPI benefit increases is another option. However, medical costs do not follow the averages of other goods and services. In addition, CPI does fluctuate over time.

Purchasing long-term care insurance is an important decision in planning your future, by making a wise decision now will reduce the risk of your investments being spent on long-term care services.

Plan for long-term care insurance now! Visit!

Tuesday, February 7, 2012

Genworth's 2011 Cost of Long Term Care Survey Nationwide

Each year Genworth Financial conducts a Cost of Care Survey to help families get an idea of what long-term care costs in their particular area. This is a national study and you can click on your particular state to see the cost of nursing home care, assisted living care, home health and community based care where you live. This is very useful for those who are researching to buy long-term care insurance as well. This will give them an idea of what daily benefit would be good to start out with. For example, if you live in the state of FL and you are almost ready to purchase long-term care insurance but you are not sure what daily benefit to obtain you can look at this survey and click on FL and see the average cost of nursing home care is $76,777 a year and divide that by 365 days you would get $210, so you would probably want to start a daily benefit on your long-term care insurance policy at or around $210 with an inflation option.

The nation average costs of long-term care are listed below:

Homemaker Services: $18 an hour
Home Health Care Aide: $19 an hour
Adult Day Care: $60 a day
Assisted Living Facility: $3,261 a month
Nursing Home Care (semi-private room): $193 a day
Nursing Home Care (private room): $213 a day

This information came from the Genworth 2011 Cost of Care Survey. You can compare the costs of care across the US by clicking here -