The Cost Of Waiting To Buy Long Term Care Insurance

Every day you wait to insure you're risking becoming uninsurable.


If you're thinking about waiting to purchase coverage, consider the impact that time has on the cost of this insurance. Each year you wait can cost you more money.

Premiums are based on age and benefits. As you age your risk of needing long term care becomes greater. The longer you wait to insure yourself for long term care, the greater the total cost can be.

As we age the risk of needing care increases and our chances of being accepted for insurance decreases.

Motley Fool suggests that getting the most out of insurance relies on your timing - you can't control the time you'll need it, but you have full control on when you buy it. Just like insurance companies won't insure a burning building, they won't insure you for long term care if you already need long term care.


An example of the Cost of Waiting To Purchase LTC Insurance:

Age Today Plan Today Annual
Premium*		 Total Premiums
if Paid to Age 80		 Cost of Waiting
5 Years*

$33,200
55 $130/day
1460 Lifetime Max
90 Day EP
5% Compound Inflation		 $2,160 $54,000
($2,100 x 25 years)
Age in 5 Years Value of Original Plan
after 5 Years		 Annual
Premium*		 Total Premiums
if Paid to Age 80
60 $160/day
1460 Lifetime Max
90 Day EP
5% Compound Inflation		 $4,360 $87,200
($4,360 x 20 years)
* Premium examples do not include any discounts or riders.
* Premiums for a 60 year old will unlikely be the same in 5 years as it is today.
* Companies introduce new policies with higher rates every few years.
* Larger companies like Genworth have a history of not raising rates once your insured.
* There also may be a pre-existing condition in 5 years that would make you ineligible for insurance.
* It will never be any cheaper to get long term care insurance and you are locking in your health.
* 1460 (days) is how much coverage is for at maximum payable benefit. Standard periods are 2 year (730), 3 year (1095), 4 year (1460), 6 year (2190), and lifetime or unlimited.
* $130x1460=$189,900 -- with interest compounded for 5 years increases to $160x1460=$233,600 and so on.
* 90 Day EP or Elimination Period is the deductible time you pay before benefits start. See policies for actual coverage for each plan for each company.


What is the Cost of Waiting to Purchase Long Term Care Insurance?
"For many, it may make sense to purchase long term care insurance when they're relatively young, because the sooner they start, the lower the premium they pay...A better reason to begin early is that changes in your health may prevent you from buying it later."
- Chicago Tribune

If you need to think about whether or not to insure you're really asking "Will I ever need long term care?"

But that question will only be answered when either you die or when you need long term care.

If you knew for certain that you were going to need long term care would you buy insurance?

So by "thinking about it" and not insuring you are saying I'm going to die without needing long term care. With that kind of predictive power you should be one heck of a Wall Street investor.


More about Long Term Care Insurance.

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