Who Should Purchase Long-Term Care Insurance?

Who Should Purchase Long-Term Care Insurance?

(And how does everything work?)

Who should purchase long term care insurance

Ever been strolling through a nice, relaxing day and thought “I wonder if I should buy long-term care insurance?”  Yeah, neither did we.  But you're here, so that’s a good sign and maybe it was just what you were thinking after all. 

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So What Is Long Term Care Insurance?

What is long term care insurance

How will you know if you should purchase long-term care insurance if you’re not even sure what it is?  Good questions beckon good answers, so hold on, we are going in for some education.  

Long-term care insurance helps to pay for the costs that are associated with, you guessed it, long-term care.  These items are what we call “activities of daily living” or ADLs, and usually range in the amount of assistance needed in one or more of the following:

  • Bathing
  • Eating
  • Toileting (getting off and on the toilet)
  • Transferring in and out of bed
  • Dressing

It will pay a certain dollar amount per day, preset by you and your independent insurance agent.  It will also pay for a certain period of time, again preset by you and your independent insurance agent.

Now You Know the Why, Let Us Tell You the Where

Where will these “activities of daily living” take place?  There are a variety of places, including some that allow you to stay right where you are.  Let us list them for you below:

  • Nursing home care
  • In-home care
  • Alzheimers facilities care
  • Respite care
  • Hospice care

Some policies, if you select the right benefits, will even cover assisted living care. These are all things to consider and all things to chat with your independent agent on. 

Does Age Matter? 

Yes, age does matter and could be crucial in determining your long-term care.  There is much debate about when the right time to buy long-term care insurance is, and we will go over some of that debate now. 

The older you get the harder it is to even qualify for long-term care insurance.  Many will say it is a delicate balance because you don’t want to buy it too early, but you definitely don’t want to wait too long either.  

Not only do premiums increase the older you get, but your health may be too poor to qualify for long-term care.  

Remember that delicate balance we were referencing? Well, some say 50 is the best age and others say 60, so let’s look at the facts. Approximately half of the people who apply at age 70 years or older are denied from long-term care insurance, so we think it’s safe to say apply prior to age 70.  

In contrast, those who have applied in their 60’s were only denied about a third of the time.  If you’re in your 50’s you have a pretty good shot with less than a quarter of applicants being denied.

Looking at the numbers, what would you say the best age to buy long-term care insurance would be?  If we were betting people, we would bet that you say your 50’s.  Are we right?  

One drawback to purchasing a few years to a decade before you turn 60 is that you have an additional few years of premiums you are responsible for.  We’ve done the numbers and on average, for a healthy 50-year-old individual, you’d likely pay an additional $2,000 in the whole grand scheme of things.  

The savings or additional funds you shell out is all relative to your appetite for risk and if you’re okay with not having coverage for almost a decade.  The question is, “Do you feel lucky. Well, do you?” We think there was another word in there from the classic Clint Eastwood line, but we'll leave that up to your imagination.

When Is It Too Late to Purchase Long Term Care Insurance?

We just went over when an ideal age would be to purchase.  We also mentioned that waiting too long could negatively impact your chances of even qualifying for a long-term care policy.  The answer is it’s really too late when you can’t qualify any longer for the policy.  The steps to take would be the following: 

  1. Find a great independent insurance agent who is knowledgeable in long-term care
  2. Asses your health status, making sure your physicals and any pre-existing conditions have been cared for and followed up on by your doctor
  3. Determine what your budget is for your long-term care
  4. Go over your analysis with a trusted independent agent prior to applying for long-term care insurance

Remember, once you apply for long-term care insurance and don’t have some of the above tackled first, the insurance carrier can use your health qualifications, or lack thereof, for any future decisions.  You want to be sure you are prepared when you apply and put your best foot forward.  

Think of your Miranda rights, anything you say or do can and will be used against you.  It doesn't seem fair, but the insurance company can’t just pretend they didn’t see that heart attack on your medical records.  They have to take in to account the risk they are taking by insuring you. 

How Do You Get a Long Term Care Policy from an Independent Insurance Agent?

The best and most cost-effective way to obtain a long-term care policy is through an independent insurance agent.  There are many out there, and the perfect one is ready to serve you.  

They say knowledge is power, and it’s what you do with that knowledge that counts.  Call your local independent agent, and if you need a reference, we have plenty. 

The good independent insurance agents we are talking about are ones that work with multiple carriers thus providing you with multiple options.  They also have a ton of knowledge and experience not only in long-term care but for all your insurance needs. 

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Elder Law Answers. November 29th, 2018. Don't Wait Too Long to Purchase Long Term-Care Insurance. https://www.elderlawanswers.com/dont-wait-too-long-to-purchase-long-term-care-insurance-16806