The Best Age to Buy Long-Term-Care Insurance
Not everyone needs long-term-care insurance. According to Consumer Reports Money Adviser, only people with assets between $200,000 and $2 million should be perusing policies. Retirees with assets of $2 million or more should be able to pay for the full cost of care. And those with a net worth below $200,000 to $300,000 (not including a house) won't be able to comfortably afford pricy premiums and will probably rely on government programs if they need long-term care.
Here's what Consumer Reports uncovered about the ideal age at which to buy:
40s. There is very little reason to buy a plan at this age. Although premiums are lower, you will spend more over time. Plus, there is no guarantee the premiums won't rise.
50s. Begin deciphering the fine print of various long-term-care options to see if a policy makes sense for you. Consider any health problems you have and how long your relatives tend to live. And evaluate the importance of leaving assets to heirs.
60s. For many people, this is the best decade to sign up. According to Consumer Reports: "The average age at which most people sign up for LTC coverage is 61. If you wait much longer, you run into insurability and affordability issues. For example, 23 percent of policy applicants in their 60s don't pass the required physical, and 45 percent of people in their 70s fail."
Here are 5 tips for buying long-term-care insurance.
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Reader Comments
Long Term Care Insurance
Dear Emily,
Consumer Reports is, and always has been, the absolute worst source for information on this subject. Everything you wrote was essentially wrong. As an example, if you buy in your 40's you absolutely do not pay more, you pay thousands less even though you pay more years.
Also, the question is not whether or not you have enough to pay for your own care, but rather "do you want to". If you do, you would be far better off self insuring your house, auto, etc. Big losses in those areas are much less likely than paying out of pocket for long term care, which has a 50% chance of happening to you.
I have been in the long term care insurance business for almost 19 years and have consulted with and contributed to many publications, like Kiplingers, over the years. I think it would be well worth your time to talk with more reputable sources than Consumer Reports and repeat the drivel they put out.
Thanks for reading this.
Sincerely,
Mike Ashley
Long Term Care Financial Partners
Health can be even more important than age.
I would agree that the sweet spot for long term care insurance is in your mid to late 50's, but health can play a much more important role than age in determining premiums.
Plans can range anywhere from 10% to 70% higher with a health condition present. This difference between waiting from age 50 to age 55 may only be around 20%.
This is why long term care insurance favors the young. They pay less over the long haul and get the benefit of coverage for all of those years.
Be a smart shopper and check out at least 3-5 major carriers to be sure you're getting the best value for your age, health and desired benefits.
There is good educational information at http://www.ltc-associates.com
What a flippant article!!
Bad advice!
40s. you will spend more over time. Wrong! You'll spend less AND you and your family will be protected all the while.
50's...evaluate the importance of leaving assets to heirs. Wrong again. Evaluate the consequences of a LTC event on the emotional, physical, and financial well being of your family.
50's...how long your relatives tend to live. Ridiculous!
60's...run into insurability and affordability issues. Those issues occur at anytime, not just in your 60's.
Who Should Buy Long-term Care Insurance?
1)Anyone who correctly identifies the potential for incapacity and the objective risk of needing long-term care
2)Anyone who understands the value of avoiding Medicaid dependency and paying privately in order to obtain quality care at the appropriate level
3)Anyone who can find the income or resources to fund the premiums after giving the coverage an appropriate priority among competing spending alternatives.
Plan early. Save. Invest. Insure.
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