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Readers’ Questions: What Do You Want to Know? Is Long Term Care insurance for me?
How might having coverage benefit my family?”
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What age is the optimal age for purchasing long term care insurance? Don’t want to be too early or too late.
Hello Kelli,
Throughout PrepSmart.com we advise people to get LTC insurance as soon as they can afford it, and will be able to afford in the future. Why? Because LTC insurance insures against the cost of long term care, and the need for long term care can arise at any age. As a matter of fact, forty percent of people needing long term care are under 65 years old.
Buying at a younger age means lower premium cost. For many companies, buying before age 40-41 is the least expensive rate. Lock it in at a young age and you can save a pretty penny over the years. We’ve run the numbers. Those who think they can save money by waiting are dead wrong. And one certainly cannot depend upon investments to pay for long term care. The numbers never did support that theory, but it is especially true in this economy.
The most important question to ask yourself is not what age is the best, but instead, “Can I afford long term care insurance now and will I be able to afford the premiums in the future?”.
I bought my policy at age 40, before turning 41. I had to let it go due to the cost of my husband’s and my health care combined with the unfortunate lessening of income. Was I sorry I “wasted” the money? Absolutely not! I could have been a car accident that put me in a wheelchair during that time. I was grateful to have had the protection while I did. I certainly wish my husband and I had policies in place now.
So, in my humble opinion, if you can afford it: Get long term care insurance while you can, as young as you can. Get inflation protection if you are under 75. Go with a financially stable company that will be around when you need it AND.. if you go with a company that has raised it’s rates in the past, expect premium rate increases right about the age you will need the insurance the most. Plan for it, save for it.
Hope this helps.
Kimberly
Thanks, good article.
If I purchase LTC insurance should I apply for a 90 wait period instead of 30 days. Doesn’t Medicare cover the 1st 100days in a nusingfacility after a 3 day stay in a hospital.
Most people do just that to save money. The reason some don’t is because many times a hospital stay doesn’t occur before needing care. For instance, with any kind of mental capability or memory loss, there usually is not a hospital stay. Clay has only had 1 one day hospital stay with his MS, but he needed care for years before that stay, and since his hospital stay was only for 1 day, and was for stitches in his head due to a fall, it probably wouldn’t have triggered a policy anyway. You just have to figure, will you be able to afford to pay out of pocket for the extra 60 days? Factor for inflation, too. And none of us can be certain about Medicare’s future ability to pay. But all this is a moot point if getting the extra 60 day’s worth keeps you from being able to pay for the policy. Get what you can afford – now and into the future.
In your opinion for good basic facility coverage should the benefit period be 3 years, 5 years or unlimited? Also which do you recommend, Automatic compound inflation option or future purchase option?
Thanks
These are the questions that need to be asked of a licensed LTCi broker. A simplistic answer to question 1 is: It’s preferable to get insured for as much as you can afford. Unlimited benefits policies are harder to come by these days, but if you can find them and you have the money to pay for the policy now and into the future, why not go for it? One never knows what might occur health-wise, so the more coverage the better.
On the other hand, if you don’t have enough money, or if you think you’ll end up on a lower fixed income in the future, then you might want to purchase less years’ worth of benefits. Most people only stay in NURSING care facilities for about 3 years, however they may need care for many years prior to needing nursing care. Getting a policy that offers home care, assisted living care, etc. provides options, but also drains the policy and you might find you have run out of benefits before you need to go into a nursing facility. Still, some insurance is always better than no insurance – if you have the money to pay for it.
Question 2: This depends upon your financial planning strategies. Both choices can have their strengths and weakness, depending upon the wording in each policy. You need to speak with an LTCi pro who can go over your budget and financial outlook to help you figure out which would be the best for you. Make sure you understand all wording in each policy, too!
Go to our Quote page, enter your info and your LTCi Buyer’s Advocate can help you through the process.