The Best Time to Buy Long-Term Care Insurance

Shawn Plummer

CEO, The Annuity Expert

Hello, and welcome to our journey into finding the best time to buy long-term care insurance. Today, we’ll explore the crucial aspects of this critical financial safety net, focusing on the ideal time to purchase a policy. We’ll also address some concerns, offer rules of thumb, and evaluate potential drawbacks. With each step, we’ll provide relatable examples to help illuminate these concepts, ultimately empowering you with the knowledge needed to make informed decisions.

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When Is the Ideal Age to Buy Long-Term Care Insurance?

The age factor plays a vital role in the cost of long-term care insurance. Generally, younger buyers can secure more favorable rates. However, according to industry experts, the best time to buy long-term care insurance typically lies in your mid-50s to mid-60s. For instance, the cost of long-term care insurance at age 77 is typically higher than if you had purchased the policy a decade earlier. This is due to the increasing likelihood of needing care as you age.

Remember Lisa, a vibrant woman in her mid-60s. Investing in a long-term care policy at this age could secure a reasonable premium rate, giving her peace of mind and financial protection for the future.

Best Time To Buy Long-Term Care Insurance

The Biggest Drawback of Long-Term Care Insurance

One of the main drawbacks of long-term care insurance is that if you don’t use it, you generally lose it. In addition, unlike life insurance, which pays a death benefit, long-term care insurance benefits are only provided if you need qualified care.

Consider Joe, who paid premiums on his long-term care policy for 15 years but stayed healthy and independent until his passing. Unfortunately, his investment didn’t provide any financial return. It’s a potential risk, but the peace of mind that comes with having a safety net can often outweigh this drawback.

A Handy Rule of Thumb for Long-Term Care Insurance

A general rule of thumb is that long-term care insurance is worth considering if your assets (excluding your home) are between $75,000 and $3 million. If your assets fall below this range, you may qualify for Medicaid, which can help cover long-term care costs. Conversely, if you have assets over $3 million, you might have enough financial cushion to self-insure.

Take Susan, who had savings and investments of around $500,000. Yet, after careful consideration, she bought long-term care insurance, providing coverage and protecting her hard-earned nest egg.

When To Buy Long Term Care Insurance

Understanding Premium Increases Over Time

The question of whether long-term care premiums increase over time is an important one. The answer largely depends on the type of policy you buy. Some policies have fixed premiums, while others may increase premiums based on inflation, changes in health, or other factors. Understanding this upfront can help avoid unpleasant surprises down the road.

Think about John, who chose a policy with a fixed premium. Even though the initial cost was higher, he appreciated the stability and predictability of his long-term care insurance costs.

Who Might Not Benefit from Long-Term Care Insurance?

Long-term care insurance isn’t the right choice for everyone. For example, individuals with limited resources, who may qualify for Medicaid, or those with substantial wealth, who can self-insure, may not benefit from purchasing a policy. Additionally, individuals with severe pre-existing conditions may not qualify for coverage.

Let’s look at Mary, a 90-year-old with significant assets and good health. But, instead of buying a policy, she decided to self-insure, setting aside a portion of her assets for potential future care costs.

What Age To Buy Long Term Care Insurance

Can a 90-Year-Old Get Long-Term Care Insurance?

Although a 90-year-old can get long-term care insurance, it is usually more challenging due to age limits set by insurance companies. Often, the cut-off age for buying long-term care insurance is around 85. This doesn’t mean options don’t exist for those over 90, but they may be limited and come with higher costs.

Consider the case of Arthur, who, at 90, wanted to buy long-term care insurance. He discovered the options were few and the cost of premiums significantly higher than those for a typical 80-year-old. However, he was able to find a policy that, while costly, offered him some level of protection.

Next Steps

Navigating the world of long-term care insurance isn’t always easy. Age, health status, financial circumstances, and personal preferences all play a critical role in deciding if, when, and what kind of policy to buy. The best time to buy long-term care insurance often falls within the mid-50s to mid-60s range, and the cost of premiums can rise over time. There are limitations and potential drawbacks to consider, but for many, the peace of mind and the financial security it provides can be well worth it.

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Frequently Asked Questions

What is the long-term care insurance cost for a 70 year-old?

Long-term care insurance costs vary widely based on health status, policy features, and the insurance company. For a 70-year-old, premiums can range from $2,500 to $5,000 yearly.

What is the long-term care insurance cost for an 80 year-old?

If coverage is available, long-term care insurance for an 80-year-old can be expensive, often exceeding $8,000 to $10,000 per year. In addition, many insurers stop issuing policies around this age due to the high risk of health issues.

Can a 90 year-old get long-term care insurance?

Getting long-term care insurance at age 90 is highly unlikely. Most insurance companies stop issuing new policies to individuals around their late 70s to early 80s due to the increased risk of health issues.

Who should not buy long-term care insurance?

Those with limited assets or tight budgets may not benefit from long-term care insurance due to its high cost. Additionally, individuals with severe health conditions might not qualify. Lastly, those with substantial assets might opt to self-insure.

When is the best time to buy long-term care insurance?

The best time to buy long-term care insurance is typically in your mid-50s to mid-60s when premium rates are more favorable, and the likelihood of approval is higher.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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