While long-term care (LTC) insurance may be necessary for financial security, the premiums can be steep. One way to hold down costs is to self-insure. If you agree to bear some of the cost if you ever need long-term care, you’ll pay less for coverage.
For example, you could agree to a limited benefit period. Some LTC policies pay benefits for as long as you need care. Those policies can be costly for an insurer, which will have to pay a great deal if you wind up in a nursing home for 10 years or longer. Therefore, LTC policies with unlimited benefits are very expensive for consumers. Possible alternatives:
* A five-year upper limit on insurance benefits. Compared with lifetime benefits, a five-year cap might cut your annual premium by 30 percent or more.
* A three-year upper limit on insurance benefits. With a three-year cap, you could pay only half the price of a policy with unlimited benefits.
* A two-year upper limit on insurance benefits. This alternative would be even less expensive.
The Federal Long Term Care Insurance Program offers each of those options, as do many plans available on the general market.
