If you're thinking about purchasing long term care coverage, you’ve already waited too long. Each year you wait, every time you say “I’m thinking about it,” every day that you don’t have it, the cost is increasing. Premiums are based on age because as you age, your risks of needing long term care are increasing.
So the cost of long term care insurance automatically increases as you get older. While you can’t control the amount of time you’ll need long term care, you have full control on when you buy coverage for it.
Companies typically come out with new plans that have higher rates every few years. Today, if you’re 55 years old, a long term care insurance plan might cost around $2,000/year. In five years, when you’re 60, that yearly cost just doubled.
When you add up your premium cost over 20 years or until the age of 80, those 5 years of waiting will cost you more than $30,000. New applicants for each new generation of long term care policies pay about 5% more each year than they would have if they had been able to buy the discontinued policy. So, the longer you wait, the more you are likely to pay for equivalent coverage.
Long term care insurance is never going to get any cheaper than it is today. If you’re thinking about whether or not to get a long term care policy, you probably need one. For many, this is a daunting thought. Most healthy adults are already paying a mortgage, car payment, health insurance, auto insurance and life insurance.
The problem is none of those matters when you’re faced with needing long term care. Most healthy adults also consider the time when they need long term care to be far off, or not until they are “old.” But keep in mind that 43% of those receiving long term care are under age 65. The time to think about long term care is not the day after you have a disabling stroke that leaves you dependent on others.
Life insurance premiums have been going down in recent years because people are living longer, but health insurance and long term care premiums have been going up for the same reason. While we may be living longer, we may require more care in our old age. Your longer life may result in your need for long term care.
In order to be eligible to purchase long term care insurance you will be need to answer questions about your health. When you’re young, these questions might be relatively easy and your eligibility is unquestionable. The longer you wait to purchase long term care insurance, the greater the likelihood you will develop health conditions that will increase your premiums or even prevent you from getting coverage at all.
Purchasing long term care insurance now rather than waiting to buy will actually cost you less. The 20 year total cost of buying now will be less than the 19 year total cost of waiting to buy next year, or the 18 year total cost of the next year and so on.
Given the odds that you will someday need some form of long term care, you should be proactive now to find the coverage plan that is right for you. Some people wait, and some wait too long.