Cheap, Cheap

No, the headline doesn’t refer, as the old joke goes, to the deep-throated sound that a 200-pound canary makes.

And no, it also doesn’t refer to the quality many employers around the country exhibit when it comes to annual raises for their hired hands.

Actually, what brought the headline to mind is the 2007 Long Term Care Insurance Price Index, which was published this month by the American Association for Long Term Care Insurance. The AALTCI (now that’s an unpronounceable acronym if there ever was one!) is headed by nonpareil LTCI advocate Jesse Slome out of Westlake Village, California (a town whose name sounds like it could be one of the nicer-type LTC facilities).

What the figures show–and what Jesse was quick to point out to Trevor Thomas, who wrote the story that appears on page 10–is that long term care insurance coverage is less expensive–i.e., cheaper–than many people think.

He goes on to say: “Especially to middle-income individuals, you have to start showing and telling the story that long term care insurance is affordable, and that’s one reason we did the Price Index. It’s also the reason we chose the 3-year benefit period, because that’s adequate or more than adequate for about 92% of policyholders who’ve actually gone on to claim.”

And, indeed, affordable is the word. This is especially true if the coverage is bought at a younger age rather than at age 65, although even at the latter age it is still a relative bargain.

But what the AALTCI’s data shows is that for preferred health 55-year-olds, the coverage is downright cheap. For instance, for a policy with a $100 maximum daily benefit for an individual who qualifies for a spousal/partner discount with a 3-year benefit period, 90-day elimination period and 5% compound inflation protection option, the average cost of the policy would come to only $665 annually.

In the case of a $150 maximum daily benefit with all the other qualifications listed above staying the same, the premium would be only $1,027 per year.