As people age, thinking about long-term care insurance becomes essential for many. Whether you’re wealthy or have very little income, this type of insurance is something you’ll want to be aware of as you age. Enrolling in long-term care insurance helps protect your assets and savings and ensures you stay in control even if you need care later. In this article, we’ll break down everything about long-term care insurance and the right time to choose it.
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The Right Time to Enroll for Care Insurance
Long-term care insurance comes in handy for planning earlier for the potentially steep costs of long-term care. This coverage allows you to choose the care you want while safeguarding your dignity, assets, and loved ones.
It’s clear that long-term care insurance is mandatory, but when should you buy it? Timing is key. If you wait too long, you might face higher premiums or even be denied coverage altogether. Conversely, getting it too early could mean paying premiums for many years before you need care. So, find the right time to get long-term care insurance.
Often, people only start thinking about the cost of long-term health care when they need it. And let me tell you, that can be a real shocker. The average yearly cost for a semi-private room in a nursing home in the U.S. was over $94,000 in 2021. Now, most folks who get long-term care insurance do so between the ages of 55 and 64. That might sound early, especially since most claims happen when people are in their 70s or 80s.
But the truth is the longer you wait to get a policy, the more it is going to cost you. For instance, let’s say a 55-year-old guy wants to get insured. With a policy that boosts benefits by 3 percent each year, he might pay around $2,075 a year. But if he waits until he is 65, that same policy could jump by about 51 percent, costing him around $3,135 a year. So, the sooner you get long-term care insurance, the better off your wallet will be in the long run.
As folks hit their 50s and celebrate another birthday, their long-term care insurance premiums usually climb by 2% to 4% yearly. And once they hit their 60s, those premiums shoot up even more – by about 6% to 8% for each year of age. So, if someone waits until they are 65 to buy a policy, they could end up paying premiums that are more than double what they would have paid if they had bought it at 55 to get the same coverage. Most people don’t need to file a claim until they are at least 80 years old.
I’m still not convinced that enrolling in long-term care insurance at the age of 50 is the most suitable option. Let’s explore the reasons!
- Your health is a big deal when looking into long-term care insurance. If you are dealing with health problems when you apply, insurance companies might see you as a risky bet. That could mean they would not give you coverage at all. The truth is, as we get older, our health tends to decline. So, if you are thinking about long-term care insurance, it is usually better to do it in your 50s rather than waiting until your 60s or 70s.
- Long-term care insurance is best for handling future care costs. But, it does not map out your long-term care plan. You must sort it out with your partner or hire a retirement planner. Buying long-term care insurance in your 50s means you will probably have a good chunk of time between getting and needing the policy. That gives you plenty of time to figure out your care plan for the future.
Conclusion
To sum up, long-term care insurance covers nursing home care, home health care, and adult day care for people 65 or older or with a chronic condition needing constant attention. There is no set age limit for buying LTC insurance. Some people can still get it after age 75, especially if they are healthy. But if you wait too long, premiums might shoot up, or you might even get turned down by insurance companies.
