When to Buy

The younger you are when you buy long-term care insurance, the cheaper it is – both in terms of today’s premium and over the full lifetime of the policy. 

People in their late 40s typically pay around $700 per year for LTC coverage and can expect 35 to 40 years of protection, assuming they live into their 80s. More than 80% of Americans in this age group can afford that expense. Waiting until age 75 means paying more than $5,000 per year – a cost that only 9% of people in that age group can afford. And at that price, the coverage is likely to last only five years instead of 35 to 40 years. You end up spending nearly double what the 40-something spent, for a fraction of the coverage. 

There’s another risk to waiting: you might not qualify at all. Insurance companies evaluate your health at the time you apply. The longer you wait, the more likely it is that you’ve developed a medical condition that limits or eliminates your eligibility. LTC insurers pay particular attention to conditions like osteoporosis, rheumatoid arthritis and Parkinson’s disease – conditions that suggest you are likely to live a long time and require extended care. You cannot buy coverage if you already have issues with the Activities of Daily Living. 

A common misconception is that an existing medical condition automatically disqualifies you. That’s not always the case. LTC insurers evaluate risk differently from life insurers. A condition that causes a life insurer to reject an application – a history of heart disease, for example – may not trouble an LTC insurer at all, because the LTC insurer isn’t worried about you dying. They’re worried about you living for a long time in a condition that requires care. Don’t assume you’re uninsurable without submitting an application. 

The bottom line: don’t wait for a health scare to start thinking about this. Buy when you’re healthy, buy when the premiums are low, and buy with enough lead time to get real value from the coverage.