Long Term Care Insurance Policy Premiums are based on:
• your age
• kind of policy you choose
• daily benefit amount to be paid
• number of years the policy will pay benefits
• after you qualify for the benefits the number of days (if any) before the company will start to pay benefits
• choice of inflation protection.
Some companies will insure you for a higher premium if you have a particular pre-existing condition.

Age is one of the most important factors which influence your Long Term Care Insurance Policy Rates and Premiums. If you are in your mid forties your annual premium can only be a few hundred dollars as opposed to several thousand dollars if you are in your in mid seventies. The cost of benefits you choose is calculated differently by different insurance companies. It is due to this reason that you may see significant differences between premiums for similar benefits.

A simple example a Long Term Care Insurance Company may calculate the premium based on every $10 of the daily benefit you choose. The premium for daily benefit of $100 would be $950 per year, if the company charged $95 for each $10 of daily benefit. A similar package of benefits may cost $150 with another company making the annual premium rise to $1,500.

Your LTCI premium will also be affected by the method and amount of inflation protection you choose. This nearly doubles the cost for those not expected to need care for many years – usually for those in their 40s and 50s. Your ability to change LTCI policy diminishes as you age but your probability of developing health conditions which make you ineligible to apply for new benefits increases.

Keep in mind that LTCI is an investment you hope that the rest of your life is financed by. It is important to buy a policy from an established company with experience in LTC insurance.

With The Tax Qualified (TQ) Long Term Care Insurance Policies you can deduct some or all of your premiums from your federal and state income taxes as a medical expense. Your age, along with your medical expenses which exceed 7.5% of your adjusted gross income (AGI) will influence the actual amount that can be deducted. At your current age, the specific amount you can deduct each year increases by an amount that is calculated by the federal government. Each year your accountant or your insurance company can give you the information regarding your deduction with reference to your LTCI premiums. Benefits received under TQ policies will not be taxed as income.

The Non-Tax Qualified (NTQ) policy premiums can not be deducted from your income taxes. The benefits received under such a policy are also not tax free. However there are other advantages with NTQ policies. The NTQ LTCI policies under the federal law pay benefits sooner than TQ policies and may have more generous benefit triggers. While Tax Qualified policies only pay if you are unable to perform 2 Activities of Daily Living (ADLs) out of a list of 6, NTQ policies begin to pay benefits when you are unable to perform 2 activities of daily living out of a list of 7.

TQ policies require a health care professional to certify that you will need at least LTC services for at least 90 days. This verification is to establish that the LTC needed is not short term and this is not a waiting period before the benefits begin. Your insurance company will still be required to pay any benefits even if you didn’t need care for the full 90 days - except for the duration Medicare paid for your care if any.