At what age should I consider long-term care insurance?

Welcome to this month’s Ask the CFP segment. This month’s question is, “At what age should I consider long-term care insurance?” Unlike homeowner’s insurance, auto insurance or health insurance, which many people have for life, long-term care insurance is unique since timing is a major part of the decision process. In general, each year that someone grows older, long-term care insurance rates increase for people that don’t have a policy yet. Someone at age 50 would pay lower rates on a new policy than someone at age 70, assuming the same health rating.

According to the Department of Health and Human Services, someone turning age 65 today has nearly a 70% chance of needing some type of long-term care in their lifetime. Obviously the chance of needing long-term care increases with age, so when should someone apply for insurance? We generally recommend looking at long-term care policies when someone is in their mid-50s. You can still apply for long-term care insurance in your 60s, but keep in mind that the costs start to climb fairly quickly at that age. You can also apply for this insurance at a younger age, but it’s more likely that disability insurance or life insurance are higher priorities before age 55.

It’s worth mentioning that long-term care insurance premiums can still increase after you’ve taken out a policy. However, the increase wouldn’t be because you had birthdays. Increases after the fact can and do happen if insurance companies receive approval from state insurance regulators, often because costs are increasing faster than they counted on. This is one reason hybrid long-term care insurance is becoming more popular. Hybrids typically combine life insurance with long-term care insurance and have different costs and benefits. They’re worth considering, in addition to more traditional long-term care insurance.

Overall, if you’re in fair health, this type of insurance is worth considering. The premiums may seem high, but it might be a fraction of the cost of a nursing home one day. If you have a question about this topic or have a question for next month’s video, please send it to [email protected]. Thanks for watching and we’ll see you next month.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. Please speak with a qualified tax or legal professional before making any changes to your personal situation.?