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Long-term care insurance rates rising, but costs vary

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Long-term care insurance is a means of ensuring that many of your health care costs are taken care of if you need long-term care in the future. This insurance is far from inexpensive, and according to the American Association for Long-Term Care Insurance, that cost is rising.

A study completed by the AALTCI reports that the cost of long-term care insurance has risen about 9 percent on average this year. However, the amount of the increase seems to depend on many factors, such as the policy specifics and the insurers.

The executive director for AALTCI said that couples' policies saw a modest increase, while policies for singles saw a great increase. The average premium for a man, age 55 and in good health, is now averaging $2,075 a year, which is significantly more than the $1,765 average last year. For a woman, age 55 and in good health, the average premium is much higher at $2,411, which is up slightly from $2,307 from last year.

Couples' premiums are usually less because it is assumed that one spouse will provide care for the ailing spouse. This year's average premium for a couple is $3,930, which is up a modest amount from last year's average of $3,840.

These figures are based on a three-year policy that would have a daily benefit of $150. If a policyholder eliminated the inflation protection on the policy -- increases are limited to 3 percent compounded annually -- then the premium would reduce by about half. Unfortunately, this also means that if the policy was used, there would be more out-of-pocket expenses for the policyholder.

As you can see, some of the factors that affect a long-term care insurance premium can be rather complex. A California attorney experienced in estate planning can provide more information about these policies and suggest ways to keep the premium down and the coverage up.

Source: The New York Times, "Long-Term Care Insurance: Costs Are Up but Vary Widely" Ann Carrns, Feb. 19, 2015

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