Tuesday, May 26, 2015

What age is the best age to start long-term care planning?

I like to say the sweet spot is between age 52 and 64 ... but keep reading. First, yes, the sweet spot is generally between your mid-50s and mid-60s. I like to say start before age 64 because once you qualify for Medicare, chances are you will take advantage of all the free preventive health exams they provide. Those exams are great. But, if your doctor finds a condition, it could prevent you from health qualifying for long-term care insurance no matter how much you are willing to pay. And, while most long term care insurance claims start at older ages, don't forget that younger people get illnesses in their 40s and 50s like MS and Parkinson's that can require the need for years of care. Just something to think about.

Monday, May 11, 2015

Long Term Care Insurance Age 65 Waiting Penalty Discussed

A couple that waits to purchase long term care insurance until age 65 will pay nearly 70 percent more than had they considered coverage when they both were age 60.

“I tell consumers the sweet spot for long term care planning is between ages 55 and 65, but the sooner the better,” explains Jesse Slome, executive director of the American Association for Long-Term Care Insurance (AALTCI).   Some was addressing mistakes people make when looking into long term care insurance.

According to the Association’s 2015 LTC Insurance Price Index, a 60-year old couple would pay $2,170 for good coverage that provided both spouses with about $165,000 of long term care benefits.  “The same coverage would cost the couple $3,590 a year, or 65 percent more, if they were age 65,” Slome explained.  “And, that is at today’s prices.  Someone who is age 60 today will likely pay more in five years because new policy rates tend to increase every year.”

Slome shared that many consumers perceive long term care insurance is ‘too expensive’ to buy.  “Many insurance agents simply focus on what I call a ‘fully loaded’ policy which of course makes the policy cost thousands of dollars,” Slome adds.  “If you can afford the coverage, more is always nice, but for most consumers a far more modest plan will be sufficient to meet their needs.  And, it will be far more reasonable.”

The long term care insurance expert noted that many agents only sell one or two long term care insurance policies a year.   “Many of the insurers now offer some really consumer-friendly benefit options such as the ability to buy more coverage in the future without having to meet health requirements,” Slome shares.  “An off-the-shelf approach speeds up the sales process but isn’t always in the customer’s best interest.”