Page 51 - Growing Old Without a Plan for Long Term Care is not for Sissies_Neat

Ok, I Get it Now, But What Does it Cost? 33 Which payment mode is the best? Many people like monthly for budget purposes. They just make Long Term Care Insurance premiums part of their monthly budget. The only problem is that the companies base the premium on annual payments and charge extra for the other payment modes. How much extra? I’ve calculated the Annual Percentage Rate (APR) on different payment modes at several different premium levels and the results range from 8. 5% APR to 18% APR. They really want you to pay annually, don’t they? So, what can you do if you want to pay monthly but don’t want to pay 8% or more for that privilege? Pay yourself on a monthly basis. Take the frst premium out of savings and pay the annual premium. Then pay 1/12 of the annual premium into your savings each month to save to pay the annual premium next year. This allows you to budget your premiums without paying the exorbitant premium surcharges the insurance company charges. So back to the original question: which payment mode is best? Unless you think insurance companies are not making enough money and you want to help them out, annual payment of Long Term Care Insurance premiums is the best way to go. How Long do I Pay Premiums Long Term Care Insurance policies are designed to be paid throughout the life of the policy and the policy life lasts as long as yours does. (Sorry to have to bring that up.) The premiums are locked in at your age and health status when you purchase the policy. In other words, the company will not raise the rates because you are older and less healthy. However, the company does reserve the option of increasing rates for all policyholders if necessary to preserve the viability of that product. Any rate increases have to be approved by the state department of insurance.