Whether you’re considering purchasing Long-Term Care (LTC) Insurance through the Federal Long Term Care Insurance Program (FLTCIP), or leaning toward buying a policy from a private sector insurer, deciding when to go for it can impact your premiums.
The Younger You Are, The Lower Your Premiums
Whether you purchase LTC insurance through FLTCIP or the private sector, the same applies: the younger you are, the lower your premiums. If you purchase an LTC policy in your 40s the premiums will be far more reasonable than if you waited until your 60s.
However, you can’t overlook the money you’re spending during the decades you’re least likely to need the coverage. According to the American Association for Long-Term Care Insurance, people older than age 70 file more than 95% of LTC insurance claims, and nearly 7 in 10 claims are filed after age 81.
“If you wait too long, you run the risk of developing a chronic condition that will either make your premium cost prohibitive or render you uninsurable.”
The Ideal Age To Buy LTC Insurance: Late 50s To Early 60s
If you’re still in good health in your late 50s or early 60s it’s the ideal time to carefully analyze what type of LTC policy is best for you. Since you’re not too young and you’re not too old, you may qualify for an affordable monthly premium.
Experts advise purchasing long-term care insurance by your 65th birthday. It’s not a coincidence that 65 is the age you’re first eligible for Medicare. Though Medicare does not cover long-term care, insurance companies believe age 65 is when you’re more likely to take advantage of preventative healthcare.
Factors To Consider Before You Purchase A Policy
Without a doubt, LTC Insurance is expensive. Even when you’re willing to pay for the coverage, it’s hard to estimate how much you’ll need. If you purchase less than you’ll need, you’ll have to use savings to pay difference. If you purchase more than you need, that money is likely lost because FLTCIP does not provide refunds. (Note: some private LTC policies allow you to transfer unused coverage to a spouse.)
You May Not Qualify If You Wait Too Long
If you wait too long, you run the risk of developing a chronic condition that will either make your premium cost prohibitive or render you uninsurable. The FLTCIP is a John Hancock insurance product. The company’s underwriters can decide not to cover you. The same applies to LTC insurance in the private market. And premiums may increase over time whether you purchase the government’s FLTCIP or a private policy.
Take the time to read the small print before you decide.
