A well known financial personality often talks about long term care insurance on his radio program. When people call in and ask when should they start buying LTC insurance, he says at about age 60.
That may make perfect sense, because at age 60, you might be pretty healthy and can still qualify for long term care insurance, and your annual premium (for now at least) would be fairly affordable.
But there are 1 in 2 odds that someday you will need long term care insurance, and you are not guaranteed that this will happen after the age of 60. Young people come down with serious illnesses and have tragic accidents too and need long term care.
There is also no denying that the older you become, the higher your annual premiums. If you buy LTC at a young age, you can lock in the premiums at a cheaper rate. You have the option to buy inflation protection throughout the years, but even with that, it will still be cheaper than waiting until your senior years to buy a policy.
Waiting even five years to buy a policy can cost you thousands of dollars. For example, buying a policy at age 60, with an annual premium of $4,000, and making payments until you are 80 years old, may cost you $30,000 more than if you bought it just five years earlier.
Single people particularly might want to buy LTC, since they do not have a spouse who can care for them.
The bottom line is that no matter how high your premiums, long term care insurance is still a bargain compared to paying $60,000 to $108,000 out of pocket a year for care. Without insurance, you can go through your life savings quickly and possibly lose everything. Ask your estate planning attorney for suggestions on long term care insurance or other instruments to protect you in these circumstances.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.