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At what age should one purchase Long Term Care insurance? I have had my own policy for one year now and sometimes I feel as though I bought it at too young in age (I'm currently 46 yrs old). The main advantage is that it gives me peace of mind knowing that should I even need the service I know that it won't be a catastrophe against my life savings. Also, I can comfortably afford the premium which amounts to about $1250 a year. The policy provides for 3 years of nursing home services with coverage provided at $150 a day. The policy includes an inflation protection adjustment of 5% each and every year (ie, 2nd year $157.50 per day daily benefit, 3rd year $165 per day daily benefit, etc.). Was I too young to have purchased at age 45?
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There are a good number of factors that should go into whether someone should be buy LTC insurance. Age is one of them, but health is probably a bigger question. A friend of my (not yet 40) recently was diagnosed with a a degenerative disease that could require LTC within the next couple of years. So she and her husband went looking for insurance.
Of course everything being equal if you can afford it and it brings you peace of mind to have it, then by all means buy it. -
What an interesting topic! I'm curious if you bought LTC insurance or were sold it. How did you determine the value of the product in your particular circumstances? Do you have a family history of longevity? With the incredible changes in medicine we will all likely live much longer with modest lifestyle care/awareness. I notice [anecdotally] people are managing without external care to mid 80's although I've no statistics to quote. It seems you could be paying $ 1250. for the next 33 years [$ 50K] to fund 3 yrs of care up to a daily rate divides out to about $ 330. per day with a made up hypothesis.Comment
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Glad to oblige. I wasn't solicited but rather I pursued a policy mainly for my own peace of mind and especially since I can afford the premium. Attached is a comparison of different policy premiums. In my family there are diabetes, heart disease, dementia, and other medical illnesses. If I couldn't afford the $1250 yearly premium I probably wouldn't have gotten it. Also, if I didn't get the policy I would have created my own fund for my own LTC coverage but as you've illustrated $1250 x 33 years = $41,250 (plus interest/growth). However with the policy the pool of money covers $150 a day x 30 days x 36 months = $162,000. The policy would cover a lot more than creating my own fund.
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In addition the policy includes 5% simple inflation protection per year;
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It is hard to say. The LTC market seems to still be evolving. I purchased LTC almost 10 years ago when I was 48 (when my employer first offered it). Since that time, they've had a rate adjustment. I had a choice of a higher premium and keep everything the same or keep the premium about the same and change the inflation protection to 4% instead of 5%.Originally posted by QuarterMillionMan View Post
My DH also signed up for LTC with his employer at the same time as I did. A couple years ago, his LTC ins company sent out a notice that they had requested a 20% rate increase with the ins commissioner. They were suggesting DH switch to another LTC provider, but the new provider's rates were just as high as the proposed rate increase so we didn't do anything. Turns out, the ins commissioner did not approve the rate increase so everything stayed the same.
Insurance companies are allowed to go to the state insurance commissioner and ask for a rate increase on existing policies. This is thing that makes me question getting a policy so early. I guess early on, ins companies weren't doing a very good job with the underwriting--maybe the bad economy played a role, too. One thing I read was the ins companies calculate a lapse rate on policies--ie, they figure a certain percentage of folks are going to drop the policy over time. Apparently, the ins companies figured more folks would drop their policies than did, so they had a higher payout of benefits.Comment
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Honestly, I'm not sure I want LTC. If I'm really, really honest with myself, I just don't think I can justify the outrageous cost of prolonging my life when I'm in no condition to even care for myself.
I can't say I'd make the same call when it came to a loved one, but that's really the way I feel about my own life. It seems like such a waste.
I know my mom feels the same way as I do, but that will be a TOUGH call to make someday. She's in her early 50's now, so it's not likely something that will be an issue anytime soon. She adamantly refuses to allow us to put her into a "home" (as if she could stop us, really). But I don't live close enough (or would even really want to) bathe, dress, feed her, if it came to that. But neither could I allow her to live in squalor and rot to death. What do you do?Comment
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Price it at 40
Price it at 50. If you experience sticker shock buy it
If you wait until age 60, you might have priced yourself out of the the policy you truly want.
You need to get it (be paying for it) BEFORE you start getting chronic health issues. For example if you have a bad back at 40, get it then, don't wait to throw your back out and get surgery, because that is a chronic condition, which will make getting the policy difficult.
Make sure any policy you get is a state partnership policy. If you don't know, start doing homework.Comment
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Personally, my life has value beyond money but that's just me and besides the point.Originally posted by NetSkyBlue View Post
LTC is for when you are not sick enough to die. Many, many people will have a period of functional decline where they need extra help with activities of daily living or shopping or preparing meals. You may be cognitively intact but infirm. Lots of people find life still worth living even if they need someone to drive them to do their shopping or prepare their meals for them. Also there are many different levels of care between a "home" and living independently and the difference in how you live WILL depend on your financial resources.
I only bring this up because if you are talking about being honest, you have to consider this as you plan for the future. Every day, I see the tragic consequences of people who failed to plan because they thought they would simply drop dead when they were no longer able-bodied and it just doesn't work like that.Comment
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Buy while you're healthy
I think you made a good decision about buying long-term care insurance. Like you said, you basically have peace of mind knowing that if anything should happen, you're prepared for it. But let me just add that more than being able to sleep at night, you also have a very good financial protection right there. You don't need to spend your life-savings on expensive long-term care services.
Experts say the "sweet spot" is mid-50s. But, I recently read that 15% of people age 50 get rejected for coverage since they already have health issues that make insurance companies run. So, I think the question is not what age, but how one's health is. Buy this insurance while you're still healthy, and if that means being in your 30s or 40s, then so be it. Just remember to buy only what you can afford.Comment
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Life insurance insures on mortality- the likelihood one will dieOriginally posted by iWilliams311 View Post
Long Term care insurance insures on morbidity- the likelihood one will get sick
Morbidity looks at chronic conditions- ALS, diabetes, dialysis and issues which people can "live with" but will need attention later in life. A bad back can prevent getting LTC coverage, if you have a surgery on something, that could prevent LTC too.
Getting life insurance at age 50 can be easier than getting LTC coverage at 50.Comment
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