Is It Time to Buy LTCi? Consider These Factors
March 12, 2014
Age and health are the two primary determinants of how much a long term care insurance policy will cost. Therefore, the best time to purchase long term care insurance is while you’re still young and in good shape, ideally, during your 50s.
Age
It is strongly advised that you buy long term care insurance before you hit the 60-year-old mark for two reasons. First, young applicants are easier to be qualified because of good health. Second, premiums are lower for those who apply early buy cialis overnight.
Applicants who are 50 to 59 years old have a very slim chance of having their application denied. The current rate of denials for this age bracket is at 14% while it is 23% for those between the ages of 60 and 69.
Though not a thrifty product, long term care insurance is more affordable for those who purchase at a young age. For instance, two couples decide to buy long term care insurance. The first couple is 50 years old, while the other is 60. The premium for the 50-year-old couple will be 27% lower because they are healthier and their risk of needing care is slimmer than the other couple.
Premiums usually go up every time a year is added to your age. If you purchased your policy early, you can be assured that the rate of increase will still be based on your age during the time you acquired the plan. Annual increase for those who bought long term care insurance in their 50s is at 2% to 4%. Meanwhile, the yearly hike is at 6% to 8% for policyholders who acquired their plan at age 60.
Apart from a smooth application and lower rates, buying young minimizes the financial risk of long term care on your finances early on. Should you meet an untimely incident that requires extensive care, you can be sure that your finances will not be rattled by care costs.
Health
There’s a saying that your money pays for long term care insurance, but it’s your health that actually buys it. Remember that you need to health-qualify before you can even purchase long term care insurance. If you are healthy, your application will be easily granted. If not, your insurer can still cover you under certain conditions, but usually at a higher price. Worst case scenario would be your application getting declined because you are deemed uninsurable by the company due to your condition. That’s why it’s encouraged that you buy while your health is still in great shape.
If you are healthy and devoid of any pre-existing condition, you can be easily entitled to a 10% discount off your premiums. This is locked-in, meaning; it will continue to be in effect even if you incur medical conditions later on.
Long term care insurance is a risk prevention tool. Since it “prevents the risk”, it should be bought long before the actual need arises. Buying it at a time when you already require care somehow defies its preventive purpose. More so, delaying its acquisition can mean a higher cost for you or worst, a denial of your application due to poor health and pre-existing conditions.