This is one of the questions we are asked the most and the answer is not as simple as the question may sound. Many people wait to purchase LTCi until the ages of 40 to 65, and some purchase after they have had a personal experience with a family member who required care.
However, the sooner you decide that long term care planning is right for you, the more options you generally have and the more affordable the coverage. That’s not to say that people at older ages don’t have options. A good long term care insurance specialist can help you determine what is available for your situation.
When you work with an independent long term care insurance specialist you can expect them to gather important information about your health, financial situation, and your expectations for care. This information will be used to shop the market and find a solution that works best for your situation. The appropriate amount of insurance also depends on what you can afford to maintain over the long term.
That depends on what your goals are for your long term care. The most appropriate level of benefits for your financial plan are what you can afford over the long term.
There are many companies offering traditional long term care insurance, hybrid, and alternative long term care policies. There is no “best company” as all of the solutions have tradeoffs that create a better fit for certain clients. Buddyins works with dozens of different products in the market because of their unique features and value propositions. The product and carrier that is best for one person may not be right for another. The marketplace is always evolving, so the best strategy is to work with a long term care insurance specialist who understands the option that is the best fit for your personal situation.
Any added features and benefits depend on the plan. Most plans now offer inflation protection of 3-5 percent. Other plans may offer international benefits for those who travel out of the country. It’s important to communicate with your long term care specialist what your needs and expectations are so that they can find a product that offers appropriate benefits for your situation.
If you have a health savings account, you may be contributing pre-tax dollars into your HSA up to your annual limit. These funds may be used to pay long term care insurance premiums for you or your spouse each year up to an annual age-based limit.
Let’s assume that a couple each year could faithfully put money aside for their long-term care needs. A fifty-year old couple that saved $1,600 a year, the premium for a policy that would pay about 2/3 of the cost for three years, and earned 10% for 30 years would have saved enough money to only pay for about one year of care at future prices. And, that amount would have to work for two people, not one year for each of them! Also, you probably didn’t accumulate the money you have by spending it when you didn’t have to. Do you plan to carry a homeowner’s policy when your mortgage is paid off?
Long-term care insurance products are age-related and health underwritten. This means you can only get a policy if you are healthy and the younger you are, the lower the premium. You will pay longer, but you’ll pay less premium than if you wait until age 65 to purchase a policy.
Adults of all ages need to seriously consider a policy. And remember, over 40% of those receiving long-term care are under 65. Finally, there’s a hidden cost of waiting that most people don’t think about. Today you might be able to buy a policy for $140 a day to cover the cost, but ten years from now, you would have to buy a policy for about $240 a day, plus you would be paying a premium for ten years older than you are now.
Example: A 50-year-old person who has a spouse or partner could buy a policy with a three-year benefit period that has a $140 daily benefit. Current cost: approximately $94 a month.
If this person waits, in 10 years, a $240 daily benefit would cost about $200 a month! And if they were to develop a serious health condition between now and then, no amount of money will buy a policy.
Bottom line: Better to buy now while you are insurable.
Yes. Private long term care insurance offers national – and in some cases, international – portability of your benefits. Be sure to let your specialist know of your retirement plans, and he or she will find you a plan that will follow you.
Both employer-provided and private disability policies only provide money to replace income lost due to a disability. Long term disability insurance is intended to pay living expenses such as a mortgage, rent, utilities, food, etc. It doesn’t provide an extra $4,000-$6,000 a month to pay for long-term care.
Also, group disability insurance is usually tied to employment, and you lose it when you leave your job. Long-term care insurance, however, pays specifically for long-term health care, such as home health and nursing home care and is a policy you can always keep no matter where you bought it.
Finally, if your employer is paying the premium for your long-term disability insurance, you will be taxed on the benefits if you have a claim. This isn’t true with long-term care insurance; the benefits are tax-free.
By filling out this form, you can meet remotely (and at your convenience) with a long term care insurance specialist with years of experience. Our service is at no cost to you, and we will help guide you to the best plan for your dollars.
Our LTC specialist community is here to help. Long term care planning may be one of the most meaningful things you can do for your family to protect them from becoming unintended caregivers.
