What Age Should I Buy?
When people learn that I sell Long Term Care Insurance, it is usually followed by similar comments. “That’s great! I wish I would have…” or “I wish my parents had…” It seems it is never the right time for anyone to purchase LTCi.
Most are very surprised to learn that there are good solutions for folks as old as 85 and above–perfect health not required! By far, the majority of the clients I have insured over the last several years have been between 60 and 80 years old!
It is true, health related insurance generally costs less and is easier to qualify for when you are younger and healthier. But there are other factors to consider when planning. (To learn more about why you should plan see: https://famcaresolutions.com/2018/11/08/november-is-long-term-care-awareness-month/)
Many of us in our 40’s and 50’s are still raising (expensive) kids and paying for College (very expensive). I personally have 3 kids at home that play club sports ($$) and a Freshman in College ($$$). My priority is replacement of income now. I am funding life insurance and disability insurance on myself and my wife until my kids are older.
What is your priority? Do you have debt to pay off? Do you need to save more for retirement? Saving money to pay for your kids or your grandkids education?
Genetics and Health are big factor. If you have had some health issues or if Cancer, heart problems, or Dementia runs in the family, you had better not wait too long or you may not qualify.
Another factor in buying traditional LTC insurance when you are younger is that you have to be prepared to pay premiums for 30 or 40 years or more before ever submitting a claim. Premiums will most likely go up.
What if I waited?
Fortunately, over the last several years, Insurance companies have taken advantage of some changes in the tax laws that encourage the creation of some new “combination” or Hybrid products that use Life Insurance and Annuities to pay for Care. These products can be an ideal solution for those that were not able to purchase LTC coverage when they were younger.
There are several benefits to Hybrid Insurance products, including building cash and having a death benefit. Underwriting is not as stringent as traditional LTC insurance. They can be funded by lump sum–even using IRA or other Qualified funds. Of course, annual pay is also an option.
So maybe you haven’t missed the boat. Or the bus! A wise advisor once told me that the best time for someone to invest is when they have the money. Yes, sooner, younger, healthier, is better; but the best time is different for everybody. Planning later in life is a heck of a lot better than not planning at all!