Affordability of
Long-Term Care Insurance
Premium rates for Long-term care insurance have a reputation for being
"high" and may be unaffordable to some people. But this is usually due
to the fact that people postpone invetigating coverage until they are
too old to get a reasonable premium rate.
For every year you wait to purchase
coverage,
your premium will be 8-15% higher. When you include the overall upward
trend in rates, those percentages change- you will pay an additional
14-22% in premium for every year you wait.
Can you afford Long-term care insurance
premiums at your age?
Click
here for our Average Monthly Premium Range Estimator
Once you've looked over
the rates, it will come as no surprise to you that the total cumulative
premium you will pay over your lifetime is lower if you purchase at a
younger age.
For example, if a 50-year-old purchases
coverage today and pays premiums until life expectancy, they will pay less
total cumulative premium than a 60-year-old who purchases coverage
today and pays premiums until life expectancy.
In addition, the 50-year-old is more likely
to qualify for coverage and be offered preferred rates
based on better health.
Is there one age
bracket where one should consider purchasing LTC insurance?
Not necessarily, since everyone's situation
is
different. While premiums are lower at younger ages, most people under
the age of 45 have higher insurance priorities that need to be met.
The age bracket between 45 and 65
is the fastest growing segment for purchasing LTC insurance. People in this age
group have normally met the 3 most important criteria for choosing LTC
insurance:
• All their
other insurance priorities are adequately covered
• They are still young enough
to be in good to excellent health
• They can
afford the
LTC insurance premium
What percentage of
my family's income should I allocate to LTC insurance premiums?
One guideline offered by the NY State
Partnership recommends no more than 7% of your annual income.
If you have enough
money to pay for your own long-term care needs, should you consider
purchasing LTC insurance?
Many people are surprised to learn that
there is
no upper limit to the amount of assets you should own before you
automatically choose to self-insure.
Thousands of wealthy people have LTC
insurance
even though they have the financial ability to pay for care out of
pocket. We asked many high-net-worth people why they had purchased
it and received a variety of different reasons.
Click
Here to Read Why the Wealthy Buy LTC Insurance
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