The average lifespan for adults in the United States is increasing. According to the National Center for Health Statistics, the life expectancy is 75.8 years for men and 81.1 years for women. The longer you live, the more likely you are to need long-term care. However, if you wait too long to search for policies, it may be too late. So, when should you buy long-term care insurance?
In this post, we’ll explore the ideal age and life stage for purchasing long-term care (LTC) insurance, as well as how purchasing earlier can reduce potential eligibility issues and lower premiums. We’ll also cover trends in Washington to help you understand if you need an LTC policy and the risks of waiting too long.
Why Timing Matters for Long-Term Care Insurance
Timing is everything when it comes to qualifying for most insurance policies. Several factors influence your eligibility and premium rates. You won’t have to wonder when you should buy long-term care insurance for long.
How age and health affect eligibility and premiums
Just like traditional medical insurance policies, your age and health play a significant role in determining not just your eligibility for LTC policies, but also the amount you will pay in premiums.
Premiums are often lower the younger and healthier you are. This is because it is less likely that you will need to access the benefits of your policy. While your rates will often increase year over year, they will increase at a lower rate when you are younger.
Why do younger applicants pay less
Younger applicants are less likely to have pre-existing health conditions that would require them to access the benefits of their policy. Conditions like Alzheimer’s Disease, dementia, and more often develop in older adults. Additionally, younger applicants are more likely to be able to care for themselves, making them a more attractive candidate for LTC insurance.
The risks of becoming uninsurable over time
So, when should you buy long-term care insurance? The longer you wait to purchase your LTC insurance policy, the more likely it is that you will become uninsurable. You may develop a health condition that would exclude you from many LTC policies. Additionally, as you age, it’s more likely that you will use your LTC benefits sooner, making you a less attractive candidate for insurance. If you are covered, you will often pay a significantly higher premium.
Life Events That Trigger Long-Term Care Planning
Most people don’t start thinking about long-term care planning until a life event triggers it. Then, you begin to wonder when you should buy long-term care insurance. Some of the most common life events are below.
Marriage or starting a family
Starting the next chapter of your life is exciting, whether you’re getting married or having a family. Those life events often prompt individuals to consider their future, which can include planning for what will happen to them in the years to come. LTC insurance plans are a great way to future-proof your care, reducing the potential burden on your spouse or children.
Caring for aging parents
As your parents age, many children take on the burden of care. This can include being the primary caregiver, paying for in-home care, or assisting them in getting settled in a nursing home or assisted living center. All of these options can be expensive, and you may begin thinking about what you can do now to prevent that from happening to you.
Retirement or estate planning
Many people dream of what they will do when they retire. That’s when you start to wonder when you should buy long-term care insurance. Unfortunately, if you wait until you are 65 to get an LTC policy, it may be too late. As you consider your retirement contributions and estate planning, be sure to think about how you will afford long-term care if you need it. LTC policies are a great way to plan for the unexpected, paying a premium now for care you may need later.
What is the Best Age and Health to Own an LTC Plan?
You can purchase an LTC plan at any age, but there is a sweet spot to help you reap the most benefits at the lowest cost to you.
Ideal age range for applying (mid-40s to early 60s)
While it may seem counterintuitive, the perfect age range to apply for an LTC insurance policy is in your mid-40s to your early 60s – before you need it. You are more likely to be healthy, and your insurance premiums will be lower. The odds that you will need to use your policy immediately are lower.
Health factors that improve approval odds
Your current health and family health history can also impact your approval odds. If you have pre-existing conditions that require care, you may not be eligible for an LTC policy. Similarly, if you have a family history of Alzheimer’s and other degenerative diseases, it may disqualify you from obtaining a policy.
Why waiting increases costs and denies risk
So, when should you buy long-term care insurance? Waiting is a good option, especially if you are trying to save money. However, waiting can increase your costs in the long term. The older you are, the higher your premiums. Additionally, the rate at which they increase year over year will also be higher if you are approved at all. The older you are, the less likely you are to be eligible for an LTC policy.
Trying to Predict Long-Term Care Needs
While family history can be a good indicator of your health, it isn’t always accurate. You cannot accurately predict what you will need in the future, so it’s best to prepare as best you can.
Why future care needs are difficult to forecast
While you can guess at certain health conditions you may develop based on family history, they are not guaranteed. As a result, it can be challenging to predict the type of care you may need in the future. For example, your mother may have needed to be in a nursing home at 72, while you may be running a marathon at the same age. You never know what you will need until it happens, so it can be hard to predict when you should buy long-term care insurance.
The role of genetics, lifestyle, and unexpected health events
Numerous factors, including family history, lifestyle, and environmental factors, influence your health. Additionally, unexpected health events may occur, like a stroke brought on by medication, that could reduce your ability to care for yourself. These circumstances cannot be predicted, but when they happen, they can be debilitating.
Planning with flexibility instead of certainty
If possible, it’s better to plan with flexibility. When you purchase an LTC policy, you pay, hoping you will never need to use it. However, it brings peace of mind knowing it’s there if you have to. If you are waiting to plan with certainty for your health care needs, it will be too late.
Consider These Factors When Buying a Policy
Thankfully, LTC policies can be customized to meet your specific needs. Below are several factors to help you understand when to purchase long-term care insurance.
Your long-term financial goals and risk tolerance
As we plan for retirement and old age, we all want to ensure that we have sufficient savings to support us throughout our lives. This includes savings, investments, and other financial assets. While a premium for an LTC policy is an expense, it can prevent you from needing to cash out your savings for unexpected medical care, which can be expensive.
Family medical history and likelihood of needing care
Consider your family medical history on both sides. If your loved ones needed care, you would also need similar care. It does not guarantee it, but it can increase your odds. Your lifestyle and level of activity can also influence the likelihood of needing care.
Budget for premiums now and in the future
The rate at which premiums increase year over year varies from year to year. However, it will increase annually. You need to budget for premiums now, as well as into the future. Depending on your age, premiums may rise 2 percent to 8 percent year over year, so it’s critical that you not only pick a policy that you can afford now, but also one that you can afford a few years from now.
Risks of Waiting Too Long to Get Coverage
While you may save money, there are risks of waiting too long to get coverage.
Common medical conditions that limit eligibility
The answer to when to get long-term care insurance is before health issues emerge. The older you get, the more likely it is that you will develop medical conditions that will limit your LTC policy eligibility. They include Alzheimer’s Disease, Parkinson’s Disease, Lou Gehrig’s Disease, dementia, cancer, stroke, etc. These health conditions often require significant and costly care, so once you have them, it is difficult to obtain coverage.
Premiums rise steeply with age.
Health conditions and illnesses become more prevalent with age as the body’s functions deteriorate. As a result, you often need more services and care than younger adults. To account for this increased cost, premiums are often higher for the elderly. They also continue to grow as you age.
Emotional and financial consequences for families
If you wait too long to obtain coverage, it may be too late. This will place a significant emotional and financial burden on your families, who will be responsible for the entire cost of your care out of pocket. This can be physically, emotionally, and financially draining for all involved, and purchasing an LTC policy can help.
Washington State Trends and Considerations
Washington State recently implemented the WA Cares Fund to help close the gap in long-term care.
Impact of the WA Cares Fund on early adoption
The WA Care Fund is mandatory in Washington. Participants contribute 0.58 percent of their paycheck. After 10 years, you can access the program’s long-term care funds. This program can influence when to purchase long-term care insurance in WA for some.
Public sentiment and awareness in Washington
Most residents agree that the WA Cares Fund’s goals are admirable. Long-term care should be more affordable. However, public sentiment about the program is mixed, if they are even aware of it at all. Many dislike the mandatory nature of the program, while others acknowledge that the cost of care will exceed the amount of funds being disbursed. Additionally, younger residents carry a larger burden, as they will pay more into it and may be unable to reap the benefits.
Why relying on public programs may fall short
Public programming can be cut depending on the administration. When it no longer receives supplemental funding, it may lack the necessary funds to cover the costs of services. Even if you have participated for the required 10 years, the WA Cares Fund may no longer exist, leaving you to pay for services you will never see.
Conclusion
LTC policies aren’t just for older adults. If you wait too long, you may become ineligible. By now, you should know the answer to the question: When should you buy long-term care insurance?
There are numerous benefits to buying an LTC policy early. Your premium will be lower, and your odds of being approved for a policy will be higher. Your LTC policy ensures you will have access to care when you need it. It will also reduce the emotional and financial burden that care can cost your loved ones.
While mid-40s to early 60s is the ideal time to purchase a policy, it’s best to evaluate your health and personal circumstances to determine the best timing for you. You may wish to invest sooner if you are worried about developing a condition later in life.
Speak with Lavine LTC Benefits for Guidance
Reach out to Lavine LTC Benefits for guidance on a long-term care insurance policy. We can help you choose the right policy, including the optimal waiting period, to meet your long-term care needs. Contact Lavine LTC Benefits today to get started.