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Kip Tips

How to Trim Long-Term-Care Premiums

Consider these three strategies to lower your costs.

The older you are when you buy long-term-care insurance, the more it will cost you. However, there are ways to snag a lower premium. Group policies, guaranteed purchase option coverage and shared benefits can help keep costs under control.

Kimberly Lankford writes about these more-economical policies in Long-Term Care You Can Afford. She also offers several tips if you’ve been having trouble paying your long-term-care premiums, either because your insurer raised your rates (as happened to thousands of federal workers and retirees this year) or because your income has decreased, consider these three strategies for lowering your costs:

Reduce the benefit period. Shrinking the benefit period from lifetime to three years, for example, still covers average long-term-care needs and may cut your premiums in half.

Lower the daily benefit. Your premiums will generally drop by the size of the benefit reduction -- for example, a 15% benefit reduction would reduce your rate by 15%. But you may have to tap your savings to make up for any future shortfall in coverage.

Extend the waiting period. But don’t go overboard. Increasing your waiting period beyond 90 days could be counterproductive, exposing you to more out-of-pocket costs than you might be able to afford.