Is there any one specific answer to this question? Numerous factors go into the decision-making process when purchasing Long Term Care Insurance. It is helpful to examine the options and availability of Long-Term Care insurance by age groups to help determine when may be the best time to purchase this type of coverage.
Experts on long term care say that the ideal average time to buy Long Term Care insurance coverage is between the ages of 50-65. This may be due to the cost of the insurance and the claims history concerning the average age of consumers who start to tap into their LTC benefits. The average LTC insurance claim occurs when we reach and are well into our eighties. That is not to say that claims do not happen earlier or after our eighties, but that is the average based on insurance companies’ historical claims data. Most insurance agents will say that it is never too early to plan for a Long-Term Care event. They say this, in part, due to the cost of the policy when you are younger and the options available to consumers. It is also important to note that your health is what truly purchases the policy. The healthier you are at the time of purchase, the lower your cost may be. The younger you are, the lower the premium may be as well. If you ask someone who has been in the business for many years and has had an actual client or personal family experience with a long-term care event, they may say to start planning as early as possible.
Here is everything you need to know about Long Term Care insurance for every age group:
Long-Term Care Insurance for People in their 20’s.
This is an age group where individuals are just starting to strike out on their own. Whether they are a college student, or someone who is working to make a living, the risks associated with a possible LTC event are real. Although they are at a lower risk potential, the chance is still a viable one.
There are some options available other than a traditional stand-alone long-term care insurance policy. There have been changes over the years in the stand-alone LTC market. There are few individual options available for this age group any longer. There are, however, actual Life insurance products that have the option of adding an LTC rider. Some insurance companies with the rider available will allow for this option to be added as early as age 21. If you have a young savvy client who is in their 20’s and wants to purchase life insurance, consider looking at a carrier with this offering. The premium will be competitive due to their younger age and possible stable health status. Most people in this age group may only want to look at term life insurance due to the cost of the coverage. That is an acceptable alternative if the contract has living benefits attached to include chronic illness coverage. This coverage may not be as robust as a true LTC rider, but it is coverage to start with for a young person. Alternatively, it may also be in their interest to look at a permanent insurance option that may build cash accumulation for future access. If they can afford to do so, add a Long-Term Rider.
Long-Term Care Insurance for People in their 30’s.
This is a time in one’s life that you are usually starting to gain traction. Your career is taking off, marriages and families are developing, and protecting that family is an important concern for most people. It is also an ideal time to look at Long Term care insurance coverage. Regarding traditional stand-alone LTC policies, they are just starting to become available in this age group. However, the actual sale of this type of coverage is pretty low for people in their 30’s. We typically see more life insurance sales with an LTC product sold to individuals in their 30’s. Health is usually very favorable at this point in our lives, and premiums are still likely to be competitive.
Long-Term Care Insurance for People in their 40’s.
Usually, this is where we start to soar and grow! We are deep in family life; we are making more money than we have in our 20’s and 30’s and we are taking retirement and our futures seriously. We are diligently working on accumulating assets for our future and for the future of our children. This is also a great time to be planning for a possible LTC event. All the insurance products that offer LTC coverage are now available in this age group. It is important to collaborate with a trusted insurance agent/advisor to explore all the options to determine the best-case solution to fit the needs of the individual. This is when we may also explore the option of short paying premiums for the coverage. The short pay options may be a 5 year pay, 10-year pay, or 20-year pay may be a viable solution while incomes are increasing and are expected to continue to grow.
Long-Term Care Insurance for People in their 50’s and 60’s.
At this point, people in their 50’s and 60’s may be at the peak of their incomes and continue to accumulate retirement assets. If they have not already put a plan in place for a possible long-term care event, this is when it becomes more crucial than ever to do so. They are still working, and income may still be increasing. As mentioned earlier, health is what purchases the policy. When entering the 50’s and 60’s, health can start to change. Certain conditions and ailments may develop that can hinder or impede the possible outcome of purchasing Long-Term Care insurance coverage. Health conditions such as diabetes, joint replacements, osteoporosis, cancer history, and other health conditions may occur and affect the rate of approval for the policy. This is a point in life that someone will want to plan for the likelihood that some form of future care may be required if they have not already done so. Health will be the determining factor on the type and amount of coverage that will be obtainable. The cost of the LTC coverage will be greater than in our 20-40’s but rates may still be competitive and short pay may also be a viable option. Most individuals are under the assumption that Medicare will cover all long-term care coverage expenses. The reality is, unfortunately, that is not the case. Please visit medicare.gov to review the coverage available through Medicare for Long-Term Care needs.
It is important to be aware of all the options for Long-Term Care planning. For individuals and families alike, the risk could be an overwhelming one. An LTC event can derail all the challenging work we have done in building our retirement portfolio. This type of planning at any stage in our life is an important one. As we age, we may need assistance in our homes with daily living activities, or a nursing home may be the best solution. The use of insurance can leverage our hard-earned dollars, which can be an ideal solution for transferring the risk to the insurance company. Working with an established advisor and agency is the key to success when obtaining and solidifying a long-term care plan for your clients.
EMG Insurance Brokerage can help.
We can help identify the best type of Life and Long-Term Care insurance coverage for your client. You can find out more about life/LTC insurance by calling EMG Insurance Brokerage. We know it is essential for advisors to access quality products, expert advice, and cost-effective solutions.
EMG Insurance Brokerage supplies a wealth of support services for the growth of insurance agents. Contact us today and get the help you need to grow your business.
Shara Sutton, CLTC
Director of Sales and Marketing
Direct: (713) 507-1042