I loved living in Africa. I still love wild spaces and the culture of living and letting live. I will retire there for sure … my 150 year old seaside cabin is ready and waiting.

But in my youth, Africa had a cost: I was far from my loved ones. A round-trip ticket to the US costs a full month’s salary.

But sometimes I thought it was worth it … like when my dear grandmother entered long-term care at the end of her life.

She was a lovely person; kind and gentle, but with a keen eye for saving a penny.

Fortunately for her, when she needed 24-hour care, a combination of good financial planning and good timing (health care was much cheaper then and Medicare had good benefits) meant she was well supplied.

However, those days are over … are you ready?

Long-term care: it will cost you

Consider these numbers:

• The average cost for a private room in a nursing home is $ 250 to $ 350 per day, or about $ 91,000 to $ 128,000 per year.

• The median cost of assisted living is $ 3,628 per month, up from $ 43,500 per year.

• A home health aide for eight hours a day costs more than $ 40,000 per year.

Most people prepare for long-term care by figuring out how much of the cost they could pay out of income and retirement savings, then looking for insurance to cover any gaps.

But long-term care insurance premiums have skyrocketed in recent years.

People live longer with chronic diseases like Alzheimer’s, just like grandma. And insurers did not anticipate a prolonged period of low interest rates, which have affected the performance of their investments that they depend on to pay future claims.

As a result, long-term care insurance premiums have skyrocketed.

In 2000, you could pay $ 880 per year for a daily benefit of $ 70, a 50-day waiting period, 5% compound inflation protection, and lifetime benefits. Today, a similar policy, but with a maximum benefit period of five years, would cost $ 2,944 per year.

Long-term care policyholders face a difficult decision: pay the higher premiums and reduce their retirement savings – reduce coverage or let the policy lapse and lose benefits.

Be smart instead

Fortunately, there are strategies you can adopt to cope with these rising insurance costs. Here are some of the easiest to implement:

• Buy a combined life and long-term care policy. They pay whether you need care or not, and the premiums are fixed. A 55-year-old man who pays $ 10,000 per year for 10 years could get a monthly long-term care benefit of $ 5,500 for up to six years, growing at 3% compounded per year. If you didn’t need long-term care, your heirs would receive a $ 130,000 death benefit, or you could cash in on the policy and get 80% of your premiums back.

• Add a chronic care rider to a permanent life insurance policy when you buy it, allowing you to use up to 2% of the death benefit per month for long-term care, with a daily maximum of $ 360. This rider it tends to add 10-12% to premiums.

The average long-term care claim is less than three years. That gives you room to adjust your policy and save on premiums:

Cut inflation protection. Cutting 5% to 3% can significantly lower your premiums. The older it is now, the better this option will be. Someone in their 70s, for example, may have accrued a large enough daily benefit with 5% inflation protection, so reducing the rate to 3% or less will be sufficient in the future.

Reduce the term of coverage. If you have lifetime benefits, you can generally reduce coverage from three to five years, which covers the average claim period. But keep in mind that the shortened time frame may be less than what you need if you develop a chronic illness.

Look for a “payment” option. Regulators in some states require insurers to offer this option to policyholders who cancel their insurance. Instead of losing all the coverage you paid for, you would get a benefit based on the premiums paid.

Of course, there are other ways to lower your health care costs, now and in the future, like health care abroad and health savings accounts.

Don’t set it and forget it

Most people react quickly to changes in the investment environment. They have sixteen opportunities and adjust their portfolios accordingly as asset values ​​change.

Unfortunately, the same is not always the case with insurance. There is a tendency to buy it and let it ride. Don’t make that mistake.

If you don’t have long-term care insurance, consider purchasing it.

If you do, review your coverage and see if it makes more sense to reduce it and divert some of the savings to your retirement, where you could get better returns.

After all, the future of healthcare in America is more uncertain than ever … and that’s a concern you don’t need.