Oct 3rd, 2013
A common question from people looking into long term care insurance is, “When should I buy a policy?” There is no across-the-board answer for every one, but generally, if you can afford to pay the premiums, it is the right time to buy.
What's the Cost?
Long term care insurance helps you cover the expenses incurred from in-home health aides, nursing homes, or other related services. Because the cost of care is so high, on average between $2,000 to $8,000 dollars a month, taking steps to insure against the risk can help you protect your retirement savings from being wiped out.
The cost varies for every one, but purchasing a policy when you are younger can save you considerably on your premiums. Although many people recommend you wait to buy until your 60s, this can often have negative consequences. First, your premiums will invariably be significantly higher than if you had applied in your 40s or 50s. Age is one of the main components factored into the premium rates, because the older you are when you apply, the higher your claims risk.
Apply in Good Health
Another downside to waiting to buy until your 60s is the most obvious: you run the risk of not medically qualifying. Too often, we have clients who shop around for long term care insurance, but fail to act in time. Instead of buying a policy, they contemplate for months, sometimes even years, until a care situation arises and by then, it is too late.
Along with choosing the right time to buy, deciding on the right amount of coverage is another decision that many people struggle with. Because the majority of claims, about 85% according to one of the top providers, last less then 5 years, we don’t recommend an unlimited benefit period for every one.
If you have a family history of Alzheimer’s or another form of dementia, an unlimited benefit period might be in your best interest. Most people, however, only need care for a year or two, so a 5 year benefit period provides enough coverage to hedge against the risk.
Do Your Research
Buying long term care insurance is an important step in securing your financial future. More people are beginning to use it as a tool in their retirement plan, as long term care awareness continues to spread. The key to getting an affordable policy is to shop around for the best rate. We will gladly provide you with a free comparison of the top long term care insurance companies for you to review on your own time.
Taking the time to educate yourself about the various long term care options will help you get the best policy at the lowest rate. Just be sure not to wait too long. Read more about the risk of long term care or request your free comparison today.