How to cut long-term care insurance costs

Long-term care insurance is an important financial planning tool that can help protect your assets and provide for your future care needs. This type of insurance is used to help cover the cost of long-term care due to a chronic medical condition, disability or disorder — which can total thousands of dollars per month or more in many cases.

The high cost of long-term care is why so many people opt to purchase this type of coverage at or near retirement. However, it's not just the cost of long-term care that can be substantial. The cost of long-term care insurance can also be significant depending on your health, your age and other factors.

But for many seniors, those costs are worth the benefits that a long-term care insurance policy can provide. And, if you're struggling to fit the cost of a policy into your retirement budget, there are a few simple strategies that you can use to help cut down on the costs while still ensuring you have adequate coverage.

Compare your long-term care insurance options here to see what it could cost you.

How to cut long-term care insurance costs

If you want to cut down on the cost of your long-term care insurance, these simple strategies can help:

Start early

One of the most effective ways to lower the cost of long-term care insurance is to start your coverage as early as possible. Premiums are typically lower when you purchase a policy in your 40s or 50s compared to waiting until your 60s or 70s. The younger and healthier you are when you apply, the more affordable your premiums will be, so do your best to purchase coverage as early as possible to keep the costs down.

For example, in 2022, the average cost of a long-term care policy with $165,000 in level benefits was $950 per year for a 55-year-old single man. And, the cost of the same policy for a 55-year-old single woman averaged about $1,500 annually during the same year.

That average price increases substantially just 10 years later. At age 65, the average single man would pay an annual premium of $1,700 per year for the same policy — nearly double the cost for a 55-year-old man. And, the average 65-year-old single woman would pay $2,700 per year for that same policy — an increase of $1,200 per year.

Find out more about your long-term care insurance options here.

Consider a shorter benefit period

Long-term care insurance policies often allow you to choose the length of the benefit period. Instead of opting for lifetime coverage, which can be quite expensive, consider a policy that covers you for a shorter duration. This can significantly reduce your premiums while still providing valuable coverage.

Adjust the daily benefit amount

The daily benefit amount is the maximum amount your insurance policy will pay for your long-term care expenses each day. By choosing a slightly lower daily benefit amount, you can reduce your premium costs. Just be sure to analyze your potential long-term care needs and expenses to determine an appropriate daily benefit amount that meets your financial goals.

Opt for an elimination period

An elimination period is the waiting period before your long-term care insurance coverage kicks in. By selecting a longer elimination period, you can reduce your premiums, as the insurer is taking on less risk with your policy. However, be sure to have alternative plans in place to cover expenses during this waiting period. Otherwise, you could end up in financial trouble by paying for the high costs of long-term care out of pocket.

Bundle your insurance policies

Some insurance companies offer discounts if you purchase multiple insurance policies from them, such as auto, home and long-term care insurance. Bundling your insurance policies can result in significant cost savings, so be sure to explore this option with your insurer if they offer this type of coverage.

Seek out discounts

Insurance companies may offer discounts based on various factors such as your marital status, gender, profession or even your membership in specific organizations. Always inquire about available discounts when shopping for long-term care insurance, as these can help lower your premium costs.

Compare quotes from multiple insurers

Shopping around and obtaining quotes from multiple insurance providers is crucial in finding the most affordable long-term care insurance policy. Each insurer has its underwriting criteria and pricing, so it's wise to compare your options to find the best deal. Get started with that process here.

The bottom line

Long-term care insurance is a crucial component of a well-rounded financial plan, but it doesn't have to break the bank. By taking proactive steps such as starting early, adjusting policy parameters and exploring discounts, you can reduce the cost of long-term care insurance while still securing essential coverage for your future care needs. Careful planning and smart decision-making can help you strike a balance between affordability and adequate protection.