Long Term Care University – Question of the Month – 02/15/11
By Aaron Skloff, AIF, CFA, MBA
Q: Some of the long term care insurance policies I am researching provide a marital or partner discount and a couples discount. Can you explain what that means and what advantages it may provide?
The Problem – Foregoing Discounts
With so many purchase options to choose from, it is easy to overlook very valuable discounts when you apply for long term care insurance.
The Solution – Take Advantage of Every Discount Available
Marital or Partner Discount. Many long term care insurance companies will provide you a 10%-15% discount if you are married or have a partner and only one of you purchases a policy. While the definition of married is universal, the definition of a partner can vary by company. You may need to meet the following criteria to qualify for a partner discount:
Two people who, at the time of application:
- Are named in a valid Certificate of License of Civil Union issued by your state; OR
- Are and have been living together for the past three consecutive years in a committed relationship as partners or family members; AND
– are committed to sharing basic living expenses; AND
– are not married to each other, or to anyone else; AND
– if related, must belong to the same generation of the same family (e.g.: brothers, sisters, cousins)
Marital or Partner Discount. Many long term care insurance companies will provide each spouse or partner a 25%-40% discount if you are married or have a partner and each of you purchases a policy. Let’s look at an example of a 50 year old husband and wife who each purchase a policy with benefits as follow: 1) $200 per day benefit, 2) 3 year benefit period, 3) 5% compound inflation protection and 4) 90 day elimination period. They were each able to obtain a 10% preferred health discount.
Bill Jones, Age 50
Sue Jones, Age 50
|Price Before Discounts $2,499.00||Price Before Discounts $2,499.00|
|Discounts $1,249.50||Discounts $1,249.50|
|Price After Discounts $1,249.50||Price After Discounts $1,249.50|
Often Overlooked. Most companies have modest minimum purchase requirements. If your spouse or partner already has a long term care insurance policy, consider purchasing a supplemental policy. The discounts you gain with the purchase of two policies may more than offset the price of a second policy.
Action Step – Take Advantage of Every Discount Available
Understand the discounts available to you if you are married or have a partner. You would still qualify for a marital discount, even if you have not spoken with an estranged spouse for 10 years. Consider purchasing two policies, even if the second policy is a nominal amount – the discounts you gain with the purchase of two policies may more than offset the price of a second policy.
Aaron Skloff, Accredited Investment Fiduciary (AIF), Chartered Financial Analyst (CFA) charter holder, Master of Business Administration (MBA), is the Chief Executive Officer of Skloff Financial Group, a NJ based Registered Investment Advisory firm. The firm specializes in financial planning and investment management services for high net worth individuals and benefits for small to middle sized companies. He can be contacted at www.skloff.com or 908-464-3060.