It’s Risky Trying to Out-Invest Long Term Care Insurance Premiums..

“As we see it, it’s far better to lock in a fixed, long-term care coverage expense at an early age, rather than to try to out-invest and gamble that policy benefits won’t be needed until you get older,” says Clayborne Cotton, founder of the online LTCi Buyer’s Advocate Alliance.

A 56-year-old purchasing a $150 daily benefit lasting 3 years would pay $1,659 a year, according to the 2006 LTC Insurance Price Index, released this in early 2006 by the American Association for LTCi in Westlake Village, Calif.

If we assume a 7 percent annual return and constant premiums, someone investing that money could likely accumulate nearly $23,000 before taxes by delaying purchase of LTC insurance by ten years.

But wait! There are several reasons for avoiding delayed purchases.

Firstly, a policy purchased at age 65 entry rates will nearly double the premium expenses from age 55 entry level premiums.

If care is needed, you can never out-invest the benefit of having insurance protection.

From a financial planning viewpoint, LTC insurance is “the moat that protects the castle”. It’s a prudent decision to spend about 1% of a one’s portfolio to protect the other 99% of what you’ve built.

Out-investing for LTC is a fanciful and truly tragic idea, because you might not be insurable in 10 years, and entry rates go up so radically by age.

The question is, “Are you ready now to request your FREE rate quote comparison?”

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