What Is the Best Age to Buy Long-Term Care Insurance?

No one wants to spend their life’s savings on an expensive nursing homestay. Long-term health insurance is the best choice to cover the assisted living or in-home care costs after your retirement. Long-term health insurance is a topic that often gets emphasized on by insurance companies but most of us avoid it until it can’t be ignored. But long-term care insurance is cost-prohibitive and every minute of delay can be adding to your costs. Thus, it is in your best interest to consult your health insurance broker immediately and discuss the details involved in starting a long-term health insurance policy. 

What Is the Best Age to Get Long-Term Health Insurance?

If you know the prices involved in getting a private bed in a nursing home, then the importance of long-term health insurance becomes an irrefutable fact. The national median monthly cost for a private room in a nursing home is$8,821 and the fact that it keeps steadily increasing over the years is not helping. 

Thus, long-term health insurance becomes an important part of every person’s retirement plan but what is the right time or age to get a long-term health insurance plan? This is the question that gets repeated often. 

American Association for Long-Term Care Insurance reports that about 95% of the long-term care insurance claims are by people above the age of 70 with about 7 in 10 claims filed after the age of 81. On the surface, this might make sense since nursing home care is required at old age. But there is a catch - the premium amount that the 70-year-old has to pay the insurance company would almost be double the amount that a 50-year-old long-term health insurer has to pay. Thus, choose wisely the age at which you start the long-term health insurance. 

Factors That Influence the Right Age to Buy Long-Term Health Insurance

Apart from the elevated premiums, few other factors might influence the age you choose to buy long-term insurance. 

1. We Are Not Getting Any Younger

As we age, our health condition changes (or to be more exact, deteriorates). Even with a healthy lifestyle, some inevitable changes happen making it difficult for us to live a comfortable life. 

Long-term health insurance costs less when you are in good health. With every birthday after your 50s, the premium amount can go up by2-4%. Most insurance companies provide discounts for healthy people and the best part is that these discounts do not change when your health deteriorates later.

Thus, the smart choice would be to start long-term health insurance while you are in good shape. The health requirements for the discounts might change with different insurance companies and thus a consult with your health insurance broker might help you figure out the best plan for you. 

2. It Might Be Now or Never

Most people procrastinate buying long-term health insurance till they actually need it. But according to American Association for Long-Term Care Insurance, as the age increases the chances of the claim getting denied also increases. The data shows that about 14% of the people in their 50s were declined coverage and the denial percentage increased to 23% for 60-year-olds. 

Instead of waiting and risking the decline in health care benefits, it is best to start long-term health insurance at the optimal age. The younger you are, the better are the odds of securing a good long-term care plan. 

3. Consider Inflation

People who buy long-term health insurance in their 50s pay premiums for more than two decades until they reap the benefits. But when you factor in inflation, the policy might lose its worth when it matures. 

For example, consider a person buying a $200,000 policy in 2021 and paying premiums for over 20 years. If the long-term care costs undergo 3% inflation per year, then the maturing amount will not be enough to cover your costs. 

The best way to overcome this inflation factor is to buy policies that come with inflation protection. These policies grow your money by adding compounds of a certain percentage or fixed amount every year. 

The Bottom Line

Long-term health insurance is important to pay for your long-term care needs and also protect your lifelong savings. Considering all the factors, it is recommended that you buy insurance before you reach the age of 60. This will ensure that your claim is not declined and you get a policy with the maximum benefits and discounts. 

Allied Brokers

Allied Brokers is an insurance company that has been servicing California and several other states for over 60 years. If you are thinking of buying a long-term health insurance, our health insurance broker can help you with the details. Get a free quote for long-term care insurance by filling out the form at https://alliedbrokers.com/phpbb/form2maillongterm.htm