Who will take care of you when you can’t take care of yourself?
Whether it’s due to an early onset of Alzheimer’s or you’re simply too old, if you can’t take care of yourself, you’ll need help.
Your loved ones can only do so much. You may be too wealthy for government assistance, and you may not be wealthy enough to pay for it all yourself. This is where long term care insurance comes in.
What is Long Term Care Insurance?
Long term care insurance is just what it sounds like: insurance that will help pay for your long term non-medical care needs – needs like assisted living, nursing home care, and home care.
I’m no expert in this area, so I turned to Wendy Boglioli, Long Term Care Planning Specialist, Olympic Gold Medalist, and National Spokesperson for Genworth Financial.
Wendy shares her thoughts on the best time to buy long term care insurance and who are the best companies to buy it from.
Wendy on the Best Time to Buy Long Term Care Insurance
The best time to buy a long term care insurance policy is when you are healthy! Because long term care insurance is fully underwritten by an insurance company, they look at insuring healthy people today (think of trying to buy home insurance when your house is on fire).
With that in mind, a person’s health will be the determining factor in both application being taken and being issued.
What is the average age of a person buying a policy today? Ten years ago it was 68. Today it is around 54.
Most of my clients today bought in their 40’s because their health was the best, and they were young (which is a huge factor as well when it comes to annual premium). Personally I bought my policy at age 42, and my husband at 45.
For us it was clearly a business decision. That, plus the fact that we are so active, climbing, skiing, cycling, etc..
We asked ourselves “if anything happened to us today where would the money come from?” We immediately said “from someone else”. So we chose to apply for long term care insurance coverage through Genworth.
Quick Stats: Long Term Care Insurance Cost
So how much does long term care insurance cost? Well, information from longtermcare.gov tells us:
“The cost of a long-term care policy varies greatly based on your age at the time of purchase, the policy type, and the coverage you select. In 2007, the average long-term care insurance policy cost about $2,207/year, covered 4.8 years of benefits, excluding the 20 percent of people who elected lifetime coverage, had a daily benefit amount of $160, was a comprehensive policy covering both facility and at-home care, and included some form of automatic inflation protection.”
Wendy on the Best Long Term Care Insurance Companies
There are great companies in the marketplace, and ones perhaps not so good. Like everything right? I always look at the companies that have been in business for over 20 years.
Keep in mind the industry itself is very young (only 38 years old), unlike life insurance and home insurance. So it is absolutely important to look at the companies that are committed to their policyholders and the long term care insurance market itself.
I also look at how many policyholders a company actually has. Remember, the bigger the pool the more the premiums are spread out.
Also, the type of people that the company insures matters. Companies continue to pay out in claims for those that go on claim. When a company insures individuals that are already in need of care, or care right around the corner, that can lead to higher premiums for everyone.
Take a look at the criteria the top companies want in their pool. If there is no limit on who they will insure, or if they begin paying out in claims in a huge way immediately, not good.
Once the homework is completed, work with your financial advisor. If you do not have one, work with a long term care financial professional. From there work with that professional to make sure you understand your coverage.
Get a Long Term Care Insurance Quote
I totally respect what Wendy recommends here, but if you want to work on your own to find and compare quotes, here are some resources:
When I turn 40 I will probably run some quotes and consider a small long term care insurance policy. Would make a great compliment to the life, health, and disability insurance suite.
What about you? Have you considered a long term care insurance policy? If so, where did you find your insurance?
For more information from Wendy Boglioli, check out her website at WendyBoglioli.com.