Let me begin with a stated opinion. I dislike industry averages. Reporters like them and they use them regularly. But, without context, averages are meaningless. If I told you you couldn’t control the temperature of the water in your shower, but that the average would be a balmy 80 degrees…how would you feel if one minute it was 100 and the next it was 60. You get the picture.
The very same is true when it comes to long-term care insurance. For years, articles and experts talk about the average amount people pay for long-term care insurance. But, half of those who buy pay less than the average (they didn’t get inferior protection) … and half paid more (they didn’t get ripped off). Okay, for those addicted to statistics, the average paid for individual long-term care insurance in 2008 was about $1,900 (meaningless to you who are considering long-term care insurance protection for yourself or a loved one. Hope you are happy.
But for those who really want a more relevant perspective, new data that is reported in the soon-to-be-published edition of the Association’s 2009 LTC Insurance Sourcebook, sheds more meaningful light. The data breaks down the range of premiums paid into age bands, showing the high and the low amount paid, as well as the mean.
Here are the findings for select age bands (2008 annual premiums paid by buyers in New York State):
Between ages 45-49 the low was $1,008 and the high was $6,445
Between ages 50-54 the low was $989 and the high was $6,407
Between ages 55-59 the low was $844 and the high was $6,939
between ages 60-64 the low was $1,125 and the high was $7,413
Between ages 65-69 the low was $1,883 and the high was $9,496
What’s clearly evident from the findings is that you can design a plan of affordable long-term care insurance protection that suits both your needs and your budget. However, the most important factor in saving money is starting the process early while you are still in relatively good health and speaking to a long-term care insurance professional who has access to policies from multiple insurance carriers. Our Association’s research has shown that virtually identical policies can range in cost by from several hundred dollars to almost $1,000 a year. It pays to work with someone who can get you the best protection for the best price.