Best Time To Buy Long Term Care Insurance

Stana Martin President of Mrs. LTC is an expert in Long Term Care Insurance.  She recently talked with Lou Giampa owner of Right at Home Westchester about a common question she gets "When (or should) I buy long term care insurance?".

Here are a few guidelines for that question:

1) Age:  Most people will wait until they are in their late 40s or above.  The average purchase window is in the mid-50s because most folks have children raised and retirement savings to protect -- and their health is still reasonably good.  However, there is no hard rule on this.  One client, with Muscular Sclerosis running in the family, bought at age 38.  Another waited until nearly 70.  Here is what I recommend:  buy as young and as healthy as you can.  One third of the 60 yr olds I speak with can no longer health qualify for this product.  99% of the 70+ crowd cannot health qualify.  So the "sweet spot" is under 70...with cost-per-unit least when you are as young and healthy as you can be.

2) Money:  The guideline is that an applicant ought to have at least $50K in savings (not counting the home) for this to be a smart financial move.  I would recommend at least $100K here in the middle of the USA -- more if the client lives in a more expensive area.  The reason is that -- if your resources are small -- you will spend as much on insurance as you have assets to protect.  Further, a low-asset person would quickly qualify for Medicaid help if care ran very long.  Thus the recommended "floor" for savings and investments is $50K to $100K. As to a ceiling (as in "when do I have enough money to fully self fund the risk"), most people say 1.5 million in net worth or more.  However, I have many clients who can fully self-insure, but buy a product anyway (especially the hybrid life/ltc products) -- because these allow them to use other people's money for expensive care while guaranteeing no loss on the premium they invested.  

3) Health:  Years ago, if you fogged a mirror with your breath, they would take you.  Not any more.  A surprising number of conditions can render a person un-insurable.  Further, two or more health conditions that 'hook' each other in co-morbidity will render a person un-insurable.  This is complex as each insurance company has their own guidelines.  Some are more friendly to past heart attacks, for instance, while others are more friendly to cortisone injected knees.  Generally someone shopping should work with a specialist in this type of coverage.  Anymore, a health decline through one company can render you un-insurable with most other companies.  Best to get it right the first time!

If you have questions about long term care insurance you can contact us.