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The Strategic Wisdom of Acquiring Long-Term Care Insurance Before 60

benefits of long term care insurance

It’s a smart move

Securing long-term care insurance before hitting the age of 60 can prove to be a prudent financial decision, shielding individuals from exorbitant costs associated with aging care. As the price of long-term care escalates, particularly for services like nursing homes that can surpass $100,000 annually, purchasing insurance in your 50s becomes a strategic move for financial well-being.

Financial advisor Nick Covyeau of Swell Financial emphasizes the importance of timing in acquiring long-term care insurance, striking a balance between not purchasing too early and avoiding a significant increase in premiums. While it’s possible to obtain coverage later in life, Covyeau suggests considering the purchase before turning 60 to maximize coverage and minimize costs.

Increase in premiums

One compelling reason to secure long-term care insurance before 60 lies in the inevitable increase in premiums with age. The policy functions similarly to other insurance products, with premiums paid in exchange for future benefits. Purchasing at a younger age ensures lower premiums, reflecting the reduced immediacy of policy utilization. Waiting until later years incurs higher costs, as insurers anticipate a greater likelihood of policy usage.

Illustrating this point, a policy providing $165,000 in benefits may cost a 55-year-old man an average premium of $950 per month. By the age of 60, the same coverage sees a hike to an average of $1,175 per month, and waiting until 65 results in an average premium of $1,700 per month. Similar cost escalations apply to women and couples seeking joint coverage.

Health is a pivotal factor influencing eligibility for long-term care insurance. Purchasing the policy in your 50s, while still relatively healthy, increases the likelihood of acceptance and decreases the risk of rejection for coverage.

Furthermore, initiating the purchase in your 50s allows ample time for planning. Considering the range of long-term care options—from nursing homes to assisted living or in-home care—becomes more feasible when decisions are made in advance. Jeff Beligotti, Vice President and Head of Long-Term Care Solutions at New York Life, emphasizes that planning ahead puts individuals in control of their care situation, preventing unexpected events from depleting retirement savings and negatively impacting portfolios.

Still waiting?

Thus, obtaining long-term care insurance before the age of 60 emerges as a strategic move that offers financial protection, favorable premiums, and the luxury of time for comprehensive planning. This proactive approach ensures individuals can navigate the challenges of aging with greater confidence and control over their future care needs.

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